GST on Shoes in India

Working out the GST on shoes

The rate turns on the price of each pair, and the calculator below uses 5% — the rate up to ₹2,500 per pair. Above ₹2,500 a pair it is 18%, and footwear parts are 18% at any price. Multiply the taxable value by 5 percent to get the GST, then add it to the base price for the total.

• For an intra-state sale, the 5% splits into 2.5% CGST and 2.5% SGST.
• For an inter-state sale, a single 5% IGST applies instead.
• The calculator on this page is pre-set to the 5% rate and handles both cases.

A worked example

Suppose a pair of shoes has a taxable value of ₹2,000 before tax. Applying 5% GST works out as follows.

Footwear rates turn on price per pair

Like clothing, footwear GST is decided by the sale value per pair rather than the material or style. GST 2.0 raised the concessional threshold from ₹1,000 to ₹2,500 on 22 September 2025, which brought most daily-wear and mid-range branded footwear into the 5% bracket. The table covers the structure.

The parts trap

This is where sellers get caught. Complete footwear under HSN 6401 to 6405 follows the value-based structure, but footwear parts under HSN 6406 are taxed at a flat 18% regardless of price. Soles, heels, insoles and uppers never qualify for the 5% rate. A manufacturer buying components pays 18% on them while selling the finished pair at 5%, which creates accumulated credit. Getting the HSN right matters: misclassifying rubber or plastic footwear under the leather code 6403 is a common filing error.

Material decides the code, price decides the rate

The HSN code depends on what the upper is made of. Leather uppers fall under 6403, rubber or plastic under 6401 or 6402, textile under 6404, and anything else under 6405. But none of that changes the tax rate, which is set purely by the ₹2,500 per-pair threshold. A pair of ₹2,000 leather formals and ₹2,000 rubber flip-flops both attract 5%.

Worked examples and ITC

On a ₹2,000 pair, GST is ₹100 at 5%, for a total of ₹2,100. On a ₹3,000 pair, GST is ₹540 at 18%, for a total of ₹3,540. Note how a ₹1,000 price difference produces a ₹440 tax difference because the rate changes bracket. Registered footwear retailers can claim full input tax credit on purchases where the invoice carries the correct HSN and GSTIN. No compensation cess applies to footwear.

Selling footwear online

A footwear seller on a marketplace generally needs GST registration from the first sale regardless of turnover, and the platform collects tax at source under Section 52. Because footwear straddles two rates at the ₹2,500 line, listing discipline matters: the rate must follow the actual selling price per pair, so a discounted pair that drops below ₹2,500 should be billed at 5%, not at the 18% its list price implied. Returns are handled through credit notes that reverse the original supply and its GST.

The inverted duty problem

Footwear manufacturers face a structural issue. Components under HSN 6406 are taxed at 18% while most finished pairs sell at 5%, so credit accumulates faster than output tax can absorb it. Raw materials such as EVA soles and adhesives also carry higher input rates. The refund mechanism for accumulated credit under an inverted duty structure exists but adds working-capital pressure, which is why the parts rate is a live issue for the industry.

Exports and handmade footwear

Footwear exports are zero-rated, and an exporter can supply under a Letter of Undertaking without paying IGST while claiming a refund of input credit. Handmade or traditional leather chappals such as Kolhapuris may qualify for consideration under the 5% bracket where they meet the relevant criteria, which matters for artisan producers.

Frequently asked questions