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Published on:

March 2, 2025

Udeetta Sarma

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Basics of GST

GST Rates and HSN Code 5402 for Synthetic Filament Yarn

Synthetic filament yarn, including high-tenacity first-textured yarn and other synthetic filament yarn, are grouped under the 5402 HSN code. Understanding the GST implications of this yarn type and classifications is an essential requirement for businesses dealing with textile products.

In India, each product falls under the HSN (Harmonized System of Nomenclature) code under the Goods and Services Tax (GST) system for easier taxation and compliance. The HSN code of yarn necklaces allows the appropriate tax rate to be applied, removing any ambiguity for traders and manufacturers.

Understanding HSN Code 5402

HSN Code 540: Synthetic filament yarn, including yarns of high tenacity (other than sewing thread hereof) of different textures.

Polyester filament yarn
Nylon filament yarn
Acrylic filament yarn
Viscose filament yarn

These yarns allow for all sorts of weaving, knitting, and fabric production in the textile sector. 5402 HSN code includes sorts of synthetic yarns in raw, twisted, & textured.

GST Rates for HSN Code 5402

The GST rates on synthetic filament yarn classified under HSN code 5402 vary based on the specific type and use case:

HSN Code	Product Description	GST Rate
5402	Synthetic filament yarn (including polyester, nylon, acrylic, viscose)	12%

The 5402 HSN code GST rate is 12%, applicable to most synthetic filament yarns. This rate applies uniformly to various forms such as raw, drawn, or textured yarn.

Types of Synthetic Filament Yarn Under HSN Code 5402

Polyester Filament Yarn (PFY)

Yarn piecing in textiles refers to one of the most applied yarns in traditional textiles, polyester filament yarn. HSN code and GST rate for polyester yarn will come under 5402 (12% GST rate is applicable)

Nylon Filament Yarn

Another widely utilised material is nylon filament yarn, which is mostly used for sports apparel and pantyhose. It , too, is attracting 12% GST under HSN code 5402, just like polyester.

Acrylic and Viscose Filament Yarn

These yarns are commonly used in blended fabrics, providing softness and durability. The GST rate under HSN code 5402 also applies here is 12%

You might also be interested in the Sewing Machine HSN Code and GST Rate - 8452.

Importance of HSN Code 5402 for Businesses

Tax Compliance

Businesses involved in Synthetic Filament Yarn/Fabric operations must correctly classify the Synthetic Filament Yarn/Fabric to quote the applicable HSN Code under 5402 to charge the GST rate.

Input Tax Credit (ITC)

The 12% GST rate is available for claiming input tax credit, thereby reducing the overall tax burden at every level of the supply chain.

Ease of Trade

The accurate yarn HSN code usage is vital for businesses to steer clear of tax disputes and is crucial for seamless trade dealings in India and outbound trade.

Check the complete List of GST Exempted Goods to see which textile products are tax-free under GST and how they compare to HSN Code 5402.

GST Compliance for 5402 HSN Code

Filing GST Returns

On its part, businesses are required to declare the sales and purchases of synthetic filament yarn covered under 5402 while submitting GST returns (GSTR-1, GSTR-3B, etc.).

Proper Invoicing

To comply with GST rules and obtain smooth ITC claims, HSN code 5402 needs to be mentioned on invoices.

GST E-Way Bill Requirements

However, for interstate movement of goods exceeding ₹50,000, a GST e-way bill is a must. 5402 is the correct classification to ensure smooth transportation.

Conclusion

For traders, manufacturers, and suppliers of synthetic filament yarn, the 5402 HSN code with GST rate serves a significant role. Companies need to have the right compliance and invoice processing under GST at 12% and submit the returns on time. The accurate classification of yarn HSN code not only facilitates legal compliance but also ensures smooth tax benefits, which makes business operations more efficient.

This makes understanding the 5402 HSN code significant for traders, manufacturers, and exporters as well as importers in the textile sector, helping them avoid any discrepancies in taxation and adhere to GST norms in every way possible.

Simplify Your GST Compliance with Swipe

Navigating through GST rates and HSN codes can be challenging, but with Swipe, it becomes a piece of cake! Our software is simple and easy to use, and it can be used by traders, manufacturers, and suppliers dealing with synthetic filament yarn (HSN Code 5402) to calculate tax accurately, generate professional invoices, and help in the easy filing of GST returns.

Keep your focus on growing your business and let us take care of your compliance needs using automated HSN code classification, e-way bill generation, and ITC tracking; you can be rest assured.

FAQ

1. What is the GST for synthetic filament yarn HSN Code 5402?

Synthetic filament yarn includes polyester, nylon, acrylic, viscose, etc., HSN Code 5402. The GST rate for synthetic filament yarn is 12%.

2 . Why is the correct classification of synthetic filament yarn under the HSN Code important?

Correct classification under the HSN Code 5402 facilitates accurate GST calculation, smooth ITC claims, adherence to tax regulations, and efficient trading activities.

3. Is an e-way bill required for the transportation of the synthetic filament yarn?

Yes, if the value of the goods is more than ₹50,000 in the case of transport between states, then a GST e-way bill has to be generated.

4. What are the applicable GST returns to be filed for synthetic filament yarn sales?

GST (Goods and Services Tax) Compliance Reporting for HSN Code 5402 GSTR-1 detailing sales and GSTR-3B summary returns must be submitted from businesses.

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