Leather & Footwear

GST to be eradicated on footwear priced below Rs. 500


Madras high court finally came up with a petition and sent notice to GST council to exclude GST on footwear priced below 500rs. Before, vat was not issued on footwear that ranged below 200rs. Footwear priced above 200rs was 4% for all the unbranded footwear. Branded footwear was charged a vat of 12.5% of vat.

Footwear industry is a huge industry with different categories. Basic valued footwear is those that fall under rs 200, mass valued footwear are those that are charged between 200-400 rs. The medium economy footwear is charged between 700-1000rs, while active sports are ranged between 1000-3000rs. The luxurious branded footwear category costs above 10,000rs.

The type of footwear a person will purchase is based on his economic standard. The state mainly has people who belong to the poor and middle class economy status who opt for the basic valued footwear of 200rs range. The vat exclusion benefited them massively.

Vat had always acted as a pain for various manufacturers who fixed the price of the footwear below 200trs. But, the main problem occurred when GST eradicated the line which helped to fix the price beyond 200, without causing any trouble.

Vat had various types of rates given for different branded and unbranded footwear. But for GST it is the same for all categories of footwear. Presently, multinational companies are producing copied unbranded footwear and creating problems for the local small scale manufacturers.

Lastly, the case was heard, noticed and it is finally adjourned. The problems faced by the local manufacturers are heard and the matter is looked upon.


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