GST on Footwear — Rates, HSN Codes & ITC

GST on footwear in India is based on the Retail Sale Price (RSP) of the product. Footwear with an RSP (Retail Sale Price) of ₹1,000 or less attracts GST at 5%. Footwear with an RSP exceeding ₹1,000 attracts GST at 12%. This rate structure applies uniformly to all types of footwear — whether leather shoes, rubber sandals, canvas shoes, sports shoes, or synthetic footwear — based purely on the price point. The HSN (Harmonised System of Nomenclature) chapters covering footwear are 6401 to 6405. HSN 6401 covers waterproof footwear; HSN 6402 covers other footwear with rubber or plastic outer soles; HSN 6403 covers footwear with leather uppers; HSN 6404 covers footwear with textile uppers; and HSN 6405 covers other footwear. It is important to note that no footwear is completely exempt from GST — unlike food items, there is no zero-rated or nil-rated category for footwear. The rate distinction applies at the time of supply based on the RSP declared on the product or in the invoice. Manufacturers and traders dealing in footwear above ₹1,000 RSP must ensure they charge 12% GST and maintain HSN-wise records. The CBIC has clarified that the RSP as labelled on the product (not the discounted selling price) determines the applicable GST rate.

Footwear is classified under HSN Chapter 64 of the GST tariff. The applicable HSN codes and corresponding GST rates are: HSN 6401 — Waterproof footwear with outer soles and uppers of rubber or plastic: 5% if RSP ≤₹1,000; 12% if RSP >₹1,000. HSN 6402 — Other footwear with outer soles and uppers of rubber or plastics (includes most sports shoes, PVC chappals): 5% (≤₹1,000) or 12% (>₹1,000). HSN 6403 — Footwear with outer soles of rubber/plastics/leather and uppers of leather (leather shoes, formal shoes): 5% (≤₹1,000) or 12% (>₹1,000). HSN 6404 — Footwear with outer soles of rubber/plastics/leather and uppers of textile materials (canvas shoes, sneakers): 5% (≤₹1,000) or 12% (>₹1,000). HSN 6405 — Other footwear: same split. HSN 6406 — Parts of footwear (soles, heels, uppers): 12% GST irrespective of value — no ₹1,000 threshold for parts. Footwear accessories such as laces (HSN 5806) attract 12% GST. Manufacturers and wholesalers with turnover above ₹5 crore must report 8-digit HSN codes on GST invoices; those between ₹1.5 crore and ₹5 crore must report 4-digit HSN codes.

The ₹1,000 GST threshold for footwear is based on the Retail Sale Price (RSP) declared on the product, NOT the actual transaction price or discounted selling price. RSP is the maximum price printed on the label of the footwear at the time of manufacture or import, inclusive of all taxes. If a pair of shoes has an RSP (MRP) of ₹1,200, it will attract 12% GST even if it is sold at a promotional price of ₹800. Conversely, if footwear has an RSP of ₹950, it will attract only 5% GST even if sold at a premium. This is clarified by the CBIC and aligns with the Legal Metrology Act requirements for RSP labelling. For unbranded footwear (typically sold in local markets without RSP labels), the taxable value is the transaction value, and the same ₹1,000 threshold applies — the seller must determine if the effective sale price is above or below ₹1,000 and charge GST accordingly. Importers must declare RSP at the time of customs clearance, and this RSP governs both customs valuation and the applicable GST rate. Businesses should ensure that their invoicing software is configured to auto-apply the correct GST rate (5% or 12%) based on the RSP of each footwear SKU.

GST rates on specific footwear categories are determined by the same ₹1,000 RSP threshold that applies to all footwear, with no special category-specific exemptions. Rubber chappals (HSN 6402) priced at ₹1,000 or below attract 5% GST — this is the most common category of affordable footwear sold in rural and semi-urban markets. If rubber chappals are priced above ₹1,000, the rate is 12%. Sports shoes from brands like Nike, Adidas, Puma, and Reebok almost invariably carry RSPs well above ₹1,000, placing them firmly in the 12% GST bracket. High-end sports footwear (above ₹5,000) is still taxed at 12% — there is no higher bracket for luxury footwear (unlike some goods taxed at 28%). Children's footwear follows the same rule: school shoes or sandals priced ≤₹1,000 get 5% GST; branded children's shoes above ₹1,000 attract 12%. Safety shoes and industrial protective footwear (steel-toed boots, chemical-resistant boots) are typically priced above ₹1,000 and attract 12% GST under HSN 6403/6405. There is no separate GST rate for orthopedic footwear (prescribed by doctors), though such footwear may attract 5% GST if priced ≤₹1,000 or 12% if above — no blanket medical exemption applies to footwear as it does to some medical devices.

Yes, footwear manufacturers and registered traders can claim Input Tax Credit (ITC) on GST paid on raw materials and inputs used in making or selling footwear, subject to the standard ITC conditions under Section 16 of the CGST Act. Raw material inputs for footwear manufacture include: leather (HSN 4107/4112/4113) — attracts 5% GST; rubber sheets/soles (HSN 4005/6406) — 12% GST; synthetic uppers and textiles (HSN 5903/6006) — varies; adhesives and chemicals — 18%; machinery for manufacturing — 18% GST. All these GST amounts paid on inputs are claimable as ITC and can be set off against the output GST collected on footwear sales. For retailers, GST paid on purchases from manufacturers or distributors is claimable as ITC. However, ITC is not available if footwear is purchased for personal use or as gifts (blocked credit under Section 17(5)). The inverted duty structure (where input GST rate > output GST rate) can arise in the 5% footwear segment, where some inputs may attract 12% or 18% GST. In such cases, manufacturers of ≤₹1,000 footwear can claim a refund of accumulated ITC under Section 54(3) of the CGST Act, which was an important relief provided to the footwear industry.