In India, the Goods and Services Tax (GST) is a tax on the sale of footwear. This tax is applied at every stage of the supply chain, starting from manufacturing to retail. The goal of implementing GST on footwear is to simplify the taxation process, get rid of cascading taxes, and establish a more transparent and consistent tax system for both goods and services. So, if you are wondering about GST on footwear in India, it is essentially about making the taxation system smoother.
Table of Contents
Latest GST Rate on Footwear
In India, the GST rate for footwear has increased from 5% to 12%. This change was made by the Ministry of Finance and took effect on November 18, 2021. The new rate consists of 6% CGST (Central Goods and Services Tax) and 6% SGST (State Goods and Services Tax) for footwear priced below Rs. 1000.
Impact of GST On Footwear in India
The rate of GST on footwear in India is based on factors like material, cost, and type:
- Handmade footwear: Nil
- Footwear priced below Rs. 1000: 5%
- Footwear priced between Rs. 1000 to Rs. 1500: 12%
- Footwear priced above Rs. 1500 or with rubber: 18%
However, effective from January 1, 2022, the GST rate for footwear has been standardized, Footwear priced below Rs. 1000: GST at 12% (6% CGST + 6% SGST).
This change resulted in a slight price increase for footwear below Rs. 1000, as the GST rate rose from 5% to 12%.
GST Registration for Footwear Business
GST registration is mandatory for those in the footwear business in India. If total turnover exceed Rs. 20 lakh in a financial year (Rs. 10 lakh in special category states), then GST registration is must. To get registered, simply go to the GST portal, fill out form REG-01, and submit the necessary documents online.
GST Return filing for Footwear
Once you have registered under GST for your footwear business in India, it is important to note with the filing requirements. Depending on your turnover and registration type, you need to file monthly or quarterly returns. Here is a list of returns required to be filed:
- GSTR-1: This return shows your outward supplies of goods or services. You need to file it by the 11th of the next month if your turnover exceeds Rs. 1.5 crore in a financial year, or by the 13th of the next month if it is up to Rs. 1.5 crore.
- GSTR-3B: This return shows the summary of your inward and outward supplies along with tax payments. You need to file it by due by the 20th/22nd/24th of the next month as per your state.
- GSTR-9: This is an annual return which shows all monthly or quarterly returns filed during a financial year. You need to file it by December 31st of the next financial year.
- GSTR-9C: This is a reconciliation statement that aligns audited financials with GST returns. You need to file it if your businesses turnover exceeding 5 crore.
Conditions to Claim GST Input Tax Credit
When it comes to GST on footwear in India, understanding Input Tax Credit (ITC) is crucial. This credit allows you to claim the tax you paid on your purchases of goods or services used in your business. Here is the things you need to know to claim GST Input:
- Valid Documents: Ensure you have a proper tax invoice or debit note from a registered supplier.
- Receipt of Goods or Services: You must have actually received the goods or services for which you are claiming the input credit.
- Tax Payment: You should have paid the tax charged on sale of goods or services to the government.
- GSTR-3B Filing: Ensure you have filed your GSTR-3B return.
- Supplier Compliance: Your supplier must have also filed his GSTR-1 return and mentioned your GSTIN in his GSTR-1.
- Business Use: The goods or services for which you are claiming Input credit, must be used for business purposes, not personal use or exempt supplies.
HSN Code for Footwear in GST
| HSN Description | HSN Code |
|---|---|
|
Footwear, Gaiters and parts of such articles |
64 |
|
Pantyhose, tights, socks, stockings and other hosiery, including graduated compression hosiery and footwear Without Knitted, Applied Soles Or Crocheted |
6115 |
|
Waterproof footwear with outer soles and uppers of plastics or rubber, the Uppers of which are neither fixed to the sole nor assembled by riveting, stitching, nailing, plugging, screwing, or similar processes |
6401 |
|
Other Footwear - Sports footwear |
6402 |
|
Footwear with outer soles of leather, plastics, rubber- Sports Footwear |
6403 |
|
footwear with outer soles of, plastics, rubber, leather or composition leather and uppers of textile materials - footwear with outer soles of plastics or rubber |
6404 |
|
Other footwear |
6405 |
|
Parts of footwear like heel cushions, removable in-soles, and similar articles like leggings, gaiters, and similar articles, and parts thereof |
6406 |
Read also: GST on Mobile Phones in India 2024 – Latest!
Conclusion
Effective from January 1, 2022, all types of footwear are now subject to a uniform GST rate of 12%. Whether you are selling footwear or offering related services, timely GST registration, return filing, and tax payments are crucial. You can also claim GST Input Tax Credit for taxes paid on your footwear purchases, following specific conditions. This brief aims to clarify the GST on footwear in India.
Frequently Asked Questions (FAQ)
If you are a service provider or supplier of footwear, you must register for GST, submit your returns, and pay your taxes on schedule. Under some restrictions, you may also be able to claim GST ITC for the tax you paid on shoes or related services.
The GST rate will alter on January 1, 2023. The goods and services tax (GST) on clothing, textiles, and footwear has been increased by the government from 5% to 12%.