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GST Rate on Footwear in India
GST Rate on Footwear in India
| Footwear Price | GST Rate |
|---|---|
| Footwear priced up to ₹1,000 | 12% |
| Footwear priced above ₹1,000 | 18% |
Key Points to Remember:
- Lower-priced footwear (₹1,000 or less) is taxed at 12% to make essential footwear more affordable.
- Luxury or high-end footwear (above ₹1,000) attracts 18% GST as it falls under non-essential goods.
HSN Codes for Footwear Under GST
| HSN Code | Description | GST Rate |
|---|---|---|
| 6401 | Waterproof footwear (e.g., rubber boots) | 18% |
| 6402 | Sports footwear and trainers | 18% |
| 6403 | Leather footwear | 18% |
| 6404 | Footwear with rubber or plastic soles | 18% |
🔹 HSN codes help businesses classify their products properly to ensure correct GST compliance.
GST Applicability on Footwear
1. GST on Readymade Footwear
- The GST rate on shoes and sandals depends on the price, as discussed earlier (12% for below ₹1,000, 18% for above ₹1,000).
2. GST on Custom-Made Footwear
- If you get handmade or customized footwear, GST may vary depending on the materials used and the business’s GST registration status.
3. GST and Input Tax Credit (ITC) for Footwear Businesses
- Businesses involved in footwear manufacturing and retail can claim Input Tax Credit (ITC) on GST paid for raw materials like leather, rubber, or synthetic components.
4. GST and E-Invoicing for Footwear Sellers
- E-invoicing is mandatory for businesses exceeding a certain turnover threshold.
- This means registered sellers must generate e-invoices for B2B transactions, ensuring transparency in taxation.
Impact of GST on Footwear Prices
✔️ Affordability for Low-Income Consumers: Since essential footwear under ₹1,000 is taxed at a lower rate (12%), it helps maintain affordability.
✔️ Higher Prices for Branded and Luxury Shoes: Branded sneakers, premium leather shoes, and designer footwear priced above ₹1,000 fall under 18% GST, making them more expensive.
✔️ Encouragement for Domestic Footwear Industry: The structured GST rates aim to promote domestic manufacturing and reduce tax evasion in the footwear sector.
FAQs on GST Rate for Footwear
1. What is the GST rate on shoes?
- If the shoe price is ₹1,000 or less, GST is 12%.
- If the shoe price is above ₹1,000, GST is 18%.
2. What is the GST rate on sports shoes?
- Sports shoes fall under HSN code 6402 and attract 18% GST.
3. Is GST applicable on handmade footwear?
- If the footwear is handmade by local artisans, it may be exempt from GST under certain conditions.
- However, if it is sold through a registered business, GST may apply.
4. Can footwear businesses claim Input Tax Credit (ITC) on GST?
- Yes, businesses can claim ITC on raw materials and other inputs used in footwear manufacturing.
5. Is GST included in the MRP of shoes?
- Yes, the MRP of footwear includes GST, so consumers don’t need to pay extra at the time of purchase.
Final Thoughts
The GST rate on footwear in India is 12% for shoes priced up to ₹1,000 and 18% for shoes above ₹1,000. Different types of footwear are classified under specific HSN codes, and businesses can avail Input Tax Credit (ITC) on raw materials.
Whether you’re buying budget footwear or premium branded shoes, understanding GST helps you make an informed purchase!
For more updates on GST, footwear taxation, and business regulations, stay tuned.