GST Council Reduces GST Rates for Leather and Footwear Sector
At its 56th meeting
held on 3rd September 2025 in New Delhi under the chairpersonship of Union
Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman, the
GST Council announced key tax rate revisions for the leather and footwear
sector. These reforms aim to reduce consumer costs, provide relief to small
and medium manufacturers, and enhance competitiveness of Indian products in
domestic and international markets.
GST Rate Changes – Footwear Sector
(A) From 12% to 5%
|
S.
No.
|
Chapter
/ Heading / Tariff Item
|
Description
of Goods
|
|
1
|
64
|
Footwear
of sale value not exceeding ₹2500 per pair
|
(B) Maintained at 18%
|
S. No.
|
Chapter /
Heading / Tariff Item
|
Description of
Goods
|
|
1
|
64
|
Footwear of sale
value exceeding ₹2500 per pair
|
Impact:
The rate cut on affordable footwear will directly benefit lower and
middle-income consumers, reducing retail prices of commonly used shoes and
sandals. At the same time, premium footwear above ₹2,500 per pair will continue
to attract 18% GST, maintaining revenue neutrality.
GST Rate Changes – Leather Sector
(A) From 12% to 5%
|
S.
No.
|
Chapter
/ Heading / Tariff Item
|
Description
of Goods
|
|
1
|
4107
|
Leather
further prepared after tanning or crusting, including parchment-dressed
leather, of bovine (including buffalo) or equine animals, without hair on,
whether or not split (other than leather of heading 4114)
|
|
2
|
4112
|
Leather
further prepared after tanning or crusting, including parchment-dressed
leather, of sheep or lamb, without wool on, whether or not split (other than
leather of heading 4114)
|
|
3
|
4113
|
Leather
further prepared after tanning or crusting, including parchment-dressed
leather, of other animals, without wool or hair on, whether or not split
(other than leather of heading 4114)
|
|
4
|
4114
|
Chamois
(including combination chamois) leather; patent leather and patent laminated
leather; metallised leather
|
|
5
|
4115
|
Composition
leather with a basis of leather or leather fibre, in slabs, sheets or strip,
whether or not in rolls; parings and other waste of leather or of composition
leather, not suitable for manufacture of leather articles; leather dust,
powder and flour
|
|
6
|
6701
|
Skins
and other parts of birds with their feathers or down, feathers, parts of
feathers, down and articles thereof (other than goods of heading 0505 and
worked quills and scapes)
|
Impact:
This reform will lower the cost of raw materials for the footwear
industry, reduce production costs for leather goods, and improve the
competitiveness of Indian exports. Small-scale artisans, tanneries, and leather
processors are expected to benefit significantly.
Broader Implications
- Consumer Relief:
Lower prices for affordable footwear and leather products.
- Boost to SMEs:
Leather and footwear are labour-intensive industries employing millions,
particularly in clusters like Agra, Kanpur, Tamil Nadu, and West Bengal.
- Export Competitiveness:
By aligning GST rates with global practices, Indian leather and footwear
exports can gain a stronger foothold in international markets.
- Value Chain Benefits:
From tanneries to retail, reduced GST ensures cost savings at multiple
levels of the supply chain.
Effective Date
The revised GST rates
will apply from 22nd September 2025, as per the Council’s notification.
Conclusion
The GST Council’s
reduction of rates in the leather and footwear sectors is a forward-looking
reform that balances affordability for consumers with industrial growth. By
cutting GST from 12% to 5% on affordable footwear and a wide range of leather
materials, the government is supporting domestic manufacturing, exports, and
employment generation in two of India’s most significant labour-intensive
industries.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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