GST on Footwear 2025: Updated Rates, HSN Codes, and Compliance

GST on footwear updated with new rates and ITC rules. Learn compliance essentials to cut costs and grow your business in India
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3 min
05 September 2025

The Goods and Services Tax (GST) has transformed India's tax framework, simplifying indirect tax compliance for businesses. Among the many industries impacted, the footwear sector has seen significant changes in how taxes are levied, collected, and remitted. Footwear, an essential commodity for consumers and a vital segment of the economy, now operates under specific GST rates and compliance requirements. This article provides a comprehensive overview of GST on footwear, covering applicable rates, registration processes, return filing requirements, and eligibility criteria for claiming Input Tax Credit (ITC). By understanding these aspects, footwear businesses can ensure compliance, optimise costs, and maintain profitability. With the right knowledge and tools, navigating GST processes becomes less daunting and more efficient.

New GST rates on footwear

The GST Council has streamlined the taxation of footwear by introducing a simplified two-tier rate structure aimed at improving affordability, especially for essential and everyday footwear. The previous 12% slab has been removed, and most products now fall under either the 5% or 18% GST category.

Updated GST Structure:

Product Category

Old GST Rate

New GST Rate

Footwear priced up to Rs. 2,500

12% (on items priced above Rs. 1,000)

5%

Footwear priced above Rs. 2,500

18%

18%

 

Impact of the Reform

This change significantly reduces the tax burden on a wider range of footwear products and is expected to boost demand, particularly in price-sensitive markets like rural and semi-urban areas. By raising the threshold for the lower GST rate from Rs. 1,000 to Rs. 2,500, the reform makes quality footwear more accessible to a broader consumer base.

What Businesses Need to Know

  • Luxury and premium footwear priced above Rs. 2,500 will continue to attract an 18% GST rate.
  • Businesses must accurately classify their footwear inventory to apply the correct GST rate and avoid compliance issues.
  • For online sellers, understanding the GST implications for e-commerce is essential to ensure proper tax collection, reporting, and audit readiness.

This overhaul of footwear taxation is a part of the broader GST reform strategy to simplify compliance, reduce costs for consumers, and support retail growth across diverse market segments.

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GST registration for footwear

GST registration is mandatory for businesses with a turnover exceeding Rs. 40 lakh (Rs. 20 lakh in North-Eastern states). Registration legitimises a footwear business to collect and remit GST, offering various benefits, including claiming ITC and gaining access to a broader market.

Steps for registration:

  • Visit the GST portal: Access the official GST website and click on "Register Now."
  • Provide details: Enter the business name, PAN, mobile number, and email address.
  • Upload required documents: These include PAN card, address proof, and bank account statements.
  • Verification: Upon verification, the GST portal issues a unique GSTIN for your business.

For proprietors looking to register, refer to GST Registration for Proprietorship for a detailed guide on the process.

Why GST registration is required:

It allows businesses to legally charge GST on their products.

Registered businesses can claim ITC on the GST paid during procurement.

It opens opportunities for partnerships with larger retailers or suppliers who require GST compliance.

Stay compliant and learn more about GST registration to avoid penalties and facilitate smoother operations.

GST return filing for footwear

Filing GST returns is a vital compliance activity for registered footwear businesses. Returns record all sales, purchases, and tax paid or collected during a specific period. Proper return filing ensures transparency, ITC eligibility, and smooth operations.

Key GST returns for footwear businesses:

  • GSTR-1: Captures details of outward supplies (sales) and is filed monthly or quarterly.
  • GSTR-3B: A monthly summary return of liabilities, ITC claims, and tax payments.
  • GSTR-9: An annual return that consolidates all transactions for the financial year.

Tips for seamless filing:

  • Maintain accurate records: Keep all sales invoices, including HSN codes, updated and accurate.
  • Reconcile data: Verify purchase details with suppliers to ensure ITC claims match their returns.
  • Meet deadlines: File returns on time to avoid late fees or penalties.

For more guidance on the filing process, visit the GST return page. Accurate and timely filing not only avoids penalties but also fosters trust among stakeholders.

To simplify tax calculations, businesses can use a GST Calculator to determine liabilities and input credits efficiently.

Criteria for claiming GST input tax credit

Input Tax Credit (ITC) is a significant benefit for footwear businesses under GST. It allows them to offset their GST liability against the tax paid on inputs, reducing overall costs. However, claiming ITC is subject to specific eligibility conditions.

Eligibility criteria:

  • Goods or services must be business-related: ITC can only be claimed for purchases used exclusively for business purposes.
  • Valid tax invoice: A GST-compliant invoice from the supplier is mandatory.
  • GST compliance by suppliers: The supplier must have filed their GST returns and deposited the tax.
  • Timely filing: ITC claims must be made within the prescribed timeline.

For service-related tax implications, such as payments for repairs or installations, refer to GST on Labour Charges to understand applicable rates and conditions.

Ineligible claims:

ITC cannot be claimed for goods used for personal purposes.

Supplies falling under exempt categories are not eligible for ITC.

Understanding and complying with ITC rules is essential to avoid disputes and penalties. For a detailed overview, explore the Input Tax Credit page.

HSN codes for footwear under GST

Harmonised System of Nomenclature (HSN) codes play a critical role in GST compliance. By categorising goods uniformly, HSN codes simplify tax filing and enable clear classification for taxation.

HSN Code

Category Description

Revised GST Rate

6401

Waterproof footwear (e.g., rubber boots)

5% for items priced up to Rs. 2,500
18% for items priced above Rs. 2,500

6402

Sports shoes, trainers, and athletic footwear

5% up to Rs. 2,500
18% above Rs. 2,500

6403

Leather footwear

5% up to Rs. 2,500
18% above Rs. 2,500

6404

Footwear with rubber or plastic soles

5% up to Rs. 2,500
18% above Rs. 2,500


Proper HSN code usage on invoices is mandatory for seamless filing and avoiding penalties. Errors in classification can lead to penalties or delays in ITC claims. For more details, visit the HSN Code page. Additionally, businesses dealing in other product categories, such as solar panels, should review GST on Solar Panels for specific tax rates and exemptions.

When does GST become payable for footwear?

GST liability arises for a footwear business based on specific events, ensuring timely tax collection and compliance.

GST becomes payable:

  • At the time of supply: When goods are delivered or services are rendered.
  • On invoice issuance: The moment an invoice is generated for the transaction.
  • Upon payment receipt: The day payment is credited to the supplier’s account.

Importance of timely GST payment:

  • Ensures compliance with GST laws and avoids interest or penalties.
  • Promotes transparency in financial transactions.
  • Prevents issues during audits or assessments.

Conclusion

Understanding GST compliance for the footwear sector is essential for businesses to remain competitive and avoid penalties. From applying the correct GST rates and filing accurate returns to claiming ITC and using proper HSN codes, every step requires diligence. For those seeking financial support to expand or streamline their business, consider exploring a business loan for your operational needs.

With Bajaj Finserv Business Loan, you can get a loan of up to Rs. 80 lakh to manage your business expenses effortlessly.

Frequently asked questions

Is GST 12% applicable on footwear?

No, the 12% GST slab on footwear has been eliminated. Footwear is now taxed at either 5% (for items priced up to Rs. 2,500) or 18% (for items priced above Rs. 2,500), based on the final invoiced price.

What is the GST rate for the work of footwear making?

Footwear manufacturing or job work services are generally taxed at 12% GST under HSN code 9988. However, this can vary depending on the nature of the work and input materials. It’s important for manufacturers to classify services correctly for compliance

Is the GST rate on shoes 12% or 18%?

GST on shoes is no longer 12%. As per the latest rules, shoes priced up to Rs. 2,500 attract 5% GST, while those priced above Rs. 2,500 are taxed at 18%. The 12% rate was removed to simplify footwear taxation.

How much is the GST on leather shoes?

Leather shoes are taxed at 5% GST if the price is up to Rs. 2,500 per pair. If the price exceeds Rs. 2,500, the GST rate is 18%. The rate is based on the final sale price, not the material alone.

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