GST: Traders and Footwear Associations Demands Reinstate 5% GST on Shoes Less Than One Thousand Rupees

GST: Traders and Footwear Associations Demands Reinstate 5% GST on Shoes Less Than One Thousand Rupees

Sushmita Goswami | Apr 8, 2022 |

GST: Traders and Footwear Associations Demands Reinstate 5% GST on Shoes Less Than One Thousand Rupees

GST: Traders and Footwear Associations Demands Reinstate 5% GST on Shoes Less Than One Thousand Rupees

Traders and footwear associations have demanded the government reinstate the 5 percent GST rate on footwear (shoes and slippers). The Confederation of All India Traders (CAT) and the Indian Footwear Association (IFA) have urged Finance Minister Nirmala Sitharaman to keep the GST rate on footwear costing less than Rs 1000 at 5% from December 31, 2021, and 12 GST in excess of percent should be levied only on footwear costing more than Rs 1,000. Apart from the Union Finance Minister, these associations have also requested the Finance Ministers of the states by sending memorandums to keep footwear in the 5% GST tax slab.

BIS Standard on footwear above Rs 1000

These associations have asked Commerce Minister Piyush Goyal to implement the BIS standard only on footwear above Rs 1000. They argue that about 85% of the country’s population uses footwear costing less than Rs 1000. And 85% of the country’s population has to bear the brunt of the increase in the GST rate. 90% of footwear is produced largely by small and poor people or in-home run industry and cottage industry, For this reason, it is extremely difficult to comply with BIS standards on a large part of the footwear manufacturing in India.

Demand for 5% GST on footwear

CAIT’s National General Secretary Praveen Khandelwal said that a large number of small traders have opted for the composition scheme in footwear, so they will not be able to take the input tax credit and thus a further 7% tax will be added to the price of footwear. The benefit of increasing the tax rate on footwear will be only 15% for large manufacturers and imported brands, while the remaining 85% will prove to be an additional burden on the footwear trader and manufacturer. Therefore, the GST tax rate not exceeding 5% should be levied on footwear.

60 percent of the population wears footwear worth 30 to 250 rupees

India is the second-largest footwear manufacturer in the world. According to these associations, there are more than ten thousand manufacturing units spread across India and about 1.5 lakh footwear traders employing more than 30 lakh people, most of whom are made of very cheap footwear. Like houses and clothes, footwear is also an essential item without which one cannot get out of the house, in which a large population is women working in the house, laborers, students, and economically weaker and lower-class people. 60% of the country’s population wears footwear costing Rs.30 to Rs.250, while about 15% of the population uses footwear costing Rs.250 to Rs.500, and 10% of people use shoes costing Rs.500 to Rs.1000. The remaining 15% of people buy good quality slippers, sandals, or shoes manufactured by big footwear companies or imported brands.

StudyCafe Membership

Join StudyCafe Membership. For More details about Membership Click Join Membership Button
Join Membership

In case of any Doubt regarding Membership you can mail us at [email protected]

Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"