GST on Footwear: Rates, HSN Codes & Rules

Many consumers wonder about the impact of Goods and Services Tax (GST) on footwear prices. Following the 56th GST Council meeting, the rules for GST on shoes have been streamlined. The eligibility for a reduced GST rate has been extended from a previous limit of Rs. 1,000 to Rs. 2,500 per pair, simplifying the tax structure for both buyers and sellers.

Key Information
* As of September 22, 2025, footwear costing up to Rs. 2,500 per pair will be subject to a lower 5% GST rate.
* For footwear priced over Rs. 2,500 per pair, the existing 18% GST rate remains unchanged.

GST Applicable Rates for Footwear

The Goods and Services Tax applied to shoes is primarily determined by their retail price, though material and specific type can also play a role. The rates for various footwear categories are:

• Footwear with a price not exceeding Rs. 2,500 per pair: 5% GST.
• Footwear with a price exceeding Rs. 2,500 per pair: 18% GST.

Harmonised System of Nomenclature (HSN) Codes for Footwear

The government utilizes the Harmonised System of Nomenclature (HSN) to effectively implement Goods and Services Tax (GST) regulations. Classifying footwear under a specific HSN code simplifies the process of finding current tax rates and relevant compliance details. Below is a compilation of frequently used HSN codes for footwear and their associated GST rates. It is important to note that these are general HSN codes, with more specific subcategories available to cover all footwear types based on their characteristics.

Service Accounting Code (SAC) for Footwear Services

The Service Accounting Code (SAC) is a classification system for services associated with footwear, such as repairs, modifications, enhancements, and upkeep. For footwear repair services, the assigned SAC is 9987. These repair services are subject to an 18% GST rate under this specific SAC.

How to Calculate GST on Footwear

Here are illustrative examples demonstrating the calculation of GST for different footwear price points:

Example 1: Footwear priced at Rs. 2,000
* Price of shoes: Rs. 2,000
* Applicable GST rate: 5%
* GST amount: Rs. 2,000 × 5% = Rs. 100
* Final Consumer Cost: Rs. 2,000 + Rs. 100 = Rs. 2,100

Example 2: Footwear priced at Rs. 3,000
* Price of shoes: Rs. 3,000
* Applicable GST rate: 18%
* GST amount: Rs. 3,000 × 18% = Rs. 540
* Final Consumer Cost: Rs. 3,000 + Rs. 540 = Rs. 3,540

Effects of GST on the Footwear Sector

The implementation of GST has several notable consequences for the footwear industry:

• Affordable footwear has become more economical and readily available, potentially boosting sales among budget-conscious buyers.
• High-end footwear continues to fall under the higher GST bracket, meaning premium products maintain their elevated price points.
• Producers and retailers benefit from enhanced clarity in pricing, which in turn diminishes uncertainty and simplifies compliance requirements.

How Footwear Companies Can Avail Input Tax Credit (ITC)

To successfully claim Input Tax Credit, footwear businesses should adhere to these guidelines:

• It is essential for businesses to be GST-registered and to procure all their inputs solely from other registered suppliers.
• Accurate ITC claims must be submitted through GSTR-3B and cross-referenced with GSTR-2B. This applies only to purchases made exclusively for business operations.

Both consumers and businesses must grasp the implications of GST on footwear. The revised GST framework, introduced after the 56th GST Council meeting, aims to simplify the footwear sector. It establishes clear price thresholds and consistent rates for both affordable and luxury footwear options, making the system more transparent and beneficial for consumers.