Buying shoes? This GST detail could help you save more

If you buy a pair of shoes priced at ₹2500, you will pay only 5% GST. But if the shoes are priced even one rupee higher, say ₹2501, you will end up paying 18% GST. Wondering why? This article explains.

When buying a shoe, customers rarely give attention to the Goods and Services Tax (GST) their purchases attract. However, in view of the recent changes in GST rates, paying attention to a minor detail could help save a little more than you might expect.

In the recent GST reform, the GST Council reduced the GST on footwear to 5% but put a price cap of ₹2500. So footwear, including shoes, priced up to ₹2500 now attracts only 5% GST. However, if the price is even a little more than ₹2500, then the customer will have to pay 18%.

What does this mean for shoe buyers?

Branded and imported shoes are generally priced above ₹2500. The price cap of ₹2500 to be eligible for 5% GST means that most buyers of branded/imported shoes will not benefit from the recent GST rate changes.

However, customers buying Made in India shoes may benefit from low MRPs. They will also benefit indirectly as the GST Council has reduced GST rates on various key items used by the leather and footwear industry.

According to PIB, the following GST rate changes have been made for the benefit of the leather and footwear industry:

• GST has been reduced from 12% to 5% on chamois leather, composition leather with a basis of leather or leather fibre, and leather prepared after tanning or crusting.

• GST on supply of job work in relation to hides, skins, and leather has also been cut from 12% to 5%.

The Government expected that GST rationalisation for the leather and footwear sector would reduce the burden on young manufacturers and make products more accessible to consumers.

In the new GST regime, there are only three slabs: 5%, 18% and 40%. While all essential items are taxed in the 5% slab, luxury items are in the 18% slab, while sin goods are in the 40%^ tax slab.