How-to guides
How to Start a Garment Shop: Registrations, Sizes and Stock That Sells
A garment shop lives and dies by its buying. Every design comes in five sizes and three colours, sells for one season, and is worth less every week after that. The registrations are straightforward; the hard part is buying the right mix and knowing, by size and colour, what is actually on the shelf.
Key takeaways
- Registrations are the usual shop set: GST above the threshold, shops and establishments, trade licence where required.
- Clothes and footwear are at 5% GST up to ₹2,500 a piece or pair and 18% above, since 22 September 2025.
- Track stock by size and colour, not just by design, or reorders will be guesses.
- Plan the end-of-season sale before the season starts.
Registrations checklist
| What | Who needs it | Where |
|---|---|---|
| GST registration | Compulsory above ₹40 lakh turnover of goods in most states (₹20 lakh if you also do alterations or tailoring as a service); many wholesalers prefer registered buyers | gst.gov.in |
| Shops and establishments registration | As required by the state Act | State labour department portal |
| Trade licence | Where the municipality requires one | City corporation or municipality |
| Signboard permission | For outdoor signs, where required | Municipality |
| Udyam registration | Optional and free | udyamregistration.gov.in |
Checked on 11 November 2026 against the CGST Act and Notification 10/2019-Central Tax.
GST: the ₹2,500 rule
Readymade garments and footwear are at 5% GST when the sale value is ₹2,500 or less per piece (or pair), and 18% above ₹2,500. The test is on the price before GST, after any discount shown on the bill. A kurta at ₹2,400 is billed at 5%: ₹120 of tax, ₹2,520 in all. A jacket at ₹3,200 is at 18%: ₹576 of tax, ₹3,776.
Tags printed with tax-inclusive prices near ₹2,500 are where mistakes happen. Decide the rate on the pre-tax price and set it on each size and colour variant in the billing system.
Buying for the first season
- Start narrow: fewer designs, deeper in the sizes that sell in your area
- Use a size ratio from experience or the supplier, such as more M and L than S and XXL, and check it after the first month
- Ask suppliers about exchange of unsold sizes and colours before you buy
- Keep a reserve of cash for reorders of the designs that sell; the first sell-through is the best guide
- Note the season's end date and plan when to start the sale
Setting up the first month
- 1Create each design as an article with its sizes and colours, each combination with its own stock, price, GST rate and barcode.
- 2Print barcode tags for every piece, so billing and stock counts are by size and colour.
- 3Set an exchange policy and print it on the bill: time limit, tags on, no exchange on sale items if that is your rule.
- 4Record alterations, if you offer them, as a separate service line.
- 5At the end of week four, list sizes and colours sold out and those not moving.
The numbers to watch
| Number | How to work it out | Why it matters |
|---|---|---|
| Sell-through % | Units sold ÷ units bought, per design, at 4 and 8 weeks | Shows what to reorder and what to mark down |
| Size-level stockouts | Designs where the fast sizes are gone and slow ones remain | Lost sales hidden behind "stock available" |
| Gross margin after markdowns | (Sales − cost of goods sold) ÷ sales, including sale period | Full-price margin alone flatters the season |
| Ageing stock | Stock older than one season, at cost | Will need a discount to move |
| Exchange rate | Exchanges ÷ bills | High rates point to sizing or quality problems |
Common mistakes
- Tracking stock by design only, so size gaps are invisible
- Applying one GST rate to every garment
- Buying the whole season up front with no money for reorders
- Starting markdowns too late, when the season is over
- Exchanges done by hand without updating stock
Where TripleBill fits
TripleBill's garment mode, on the Pro plan, sells articles in sizes and colours, with stock, price and an automatic barcode for each size × colour, a size picker at the web and Windows counter (not yet in the Android app), and stock and sales reports by size and colour. Barcode labels are on Starter and above. Credit notes handle returns with stock and GST adjusted.
Frequently asked questions
What is the GST on clothes in a garment shop?
5% for garments up to ₹2,500 per piece and 18% above, on the price before GST.
Do I need a licence to open a clothing store?
There is no special licence for clothes. You need the usual shop registrations, GST when you cross the threshold, and a trade licence where your municipality requires one.
How do I decide the size mix?
Start from the supplier's typical ratio and your own customers, then adjust after the first few weeks of sales by size.
How should I handle exchanges?
As a credit note for the returned piece and a new bill for the replacement, each at the right GST rate, so stock and tax stay correct.
When should the end-of-season sale start?
Before the season ends, when the fast sizes have sold and the rest still have some weeks of demand left. Watch sell-through to decide.
About the author
Written by the TripleBill team, the people who build the billing and accounting software this site is about. We check competitor prices on their own websites on the date shown above, and we say so when our product is the weaker choice. This article is general information, not tax advice.
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Related pages
Every size and colour, counted.
Garment mode on Pro tracks stock by size × colour with barcodes for each.