GST Rates and HSN Codes on Footwear, Rubber & Plastics, Etc

GST is applicable to the sale of footwear at every phase of the supply chain from manufacturing to sale by retailers. The main purpose behind applying GST on footwear is to simplify the taxation process and eliminate the cascading effect to reduce the cost of production for manufacturers and purchase cost for consumers. As the GST is applicable on footwear, we are going to look at footwear GST rate, HSN code for footwear, and the new GST rate on footwear 2023.

Current GST Rates Applicable on Rubber and Plastic Footwear

The shoes GST rate is dependent upon the price of the shoes. The GST rate on footwear having a cost of less than 1000 is 12% (6% CGST + 6% SGST), as it was increased by the Finance Ministry from 5% to 12% vide notification no.14/2021. Safety shoes HSN code and GST rate are 64034000 and 12% respectively.

List of HSN Codes Applicable for Rubber and Plastic & Footwear

HSN code for footwear

SAC code on footwear

Understanding Rubber Footwear (HSN Code: 6401)

Characteristics and types of rubber footwear

Application of HSN code 6401

Shoes HSN code 6401 provides for, Waterproof Footwear With Outer Soles and Uppers of Rubber or of Plastics, the Uppers of Which Are neither Fixed to the Sole nor Assembled by Stitching, Riveting, Nailing, Screwing, Plugging or Similar Processes. Such products are taxable @ 18% wef 01/07/2017.

Examples and illustrations

For an illustration of footwear falling under HSN code 6401 includes waterproof sandals with rubber soles and detachable plastic uppers.  As these sandals meet the criteria outlined in the HSN code, they are taxed at 18% starting from July 1, 2017.

Understanding Plastic Footwear (HSN Code: 6402)

Characteristics and types of plastic footwear

Application of HSN code 6402

HSN code for shoes 6402 provides for, Other Footwear With Outer Soles and Uppers of Rubber or Plastics - Sports Footwear. Such products are taxable @ 18% wef 01/07/2017.

Examples and illustrations

For example, a pair of high-performance running shoes made with rubber soles and synthetic uppers falls under the category of footwear classified under HSN code 6402. These shoes, are designed for athletic sports activities and are subject to an 18% tax rate effective from July 1, 2017.

How GST on Rubber, Plastic & Footwear Impact on Consumers/ Businesses?

GST on Rubber, Plastic, and Footwear impacted consumers/ Businesses in the following ways-

• GST on footwear in India helped in eliminating multiple taxes that were levied earlier as only one tax in the name of GST is levied now.

• It eliminated the Cascading effect i.e., Tax on tax.

• It helped in reducing the cost of production for Manufacturers and Purchase costs for Consumers.

• The introduction of GST on shoes also reduced the compliance burden for the manufacturers.

What Are the GST Compliance Requirements for Rubber or Footwear Businesses?

As the GST rate on shoes on shoes becomes applicable, there is some compliance requirement also that needs to be followed by the registered taxpayers such as filing of GST return Filing, payment of GST, etc.

Following are the returns to be filled by Footwear Businesses-

1. GSTR-1- This return requires details of outward supplies (sales) of goods or services. The last date of filing this return is the 11th of the next month or the finish of the next month as per the turnover of the business.

2. GSTR-3B- This return requires details of both inward and outward supplies including tax payment. The due date of this return is the 20th of the next month.

3. GSTR-9- This is the annual return that consolidates all monthly or quarterly returns furnished during the financial year. The last date for filing this return is December 31st of the following financial year. This return is optional for businesses having aggregate turnover up to Rs 2 crore.

4. GSTR-9C- This is a reconciliation statement between the audited financial statement and the GST returns filed by the taxpayer. It is filled along with GSTR-9 and only needs to be filed by those assesses whose aggregate turnover is exceeding 5 crore.

Conclusion

The implementation of GST on footwear HSN code has streamlined the taxation process, eliminating multiple taxes and the cascading effect. The footwear HSN code and GST rate, provide clarity for businesses in their compliance efforts. 

However, the shoes HSN code and GST rate depend upon the price of the shoes. Also the reduction in compliance burden and cost of production benefits both manufacturers and consumers. Overall, the introduction of GST has brought significant simplification and efficiency to the taxation system for the footwear, rubber, and plastic industries in India.

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