CAIT and IFA urge government to keep GST on cheap footwear low

By

Isabelle Crossley

Published
Apr 11, 2022

The Confederation of All India Traders and the Indian Footwear Association have joined forces to urge the Ministry of Finance to keep Goods and Service Tax at 5% on footwear priced below Rs 1,000.

CAIT and the IFA sent a joint representation to Union Finance Minister Nirmala Sitharaman as well as all state finance ministers at the end of last week to ask for a reduction in GST on footwear priced below Rs 1,000, the Press Trust of India reported. The government previously charged 5% on footwear in the below Rs 1,000 category but decided to increase the GST rate to 12% on all footwear, irrespective of prices, from January 1, 2022. 
 
The traders’ bodies argued that 85% of the Indian population purchases footwear costing below Rs 1,000 per pair. This would mean that an increase in GST on this category of footwear would directly impact the majority of the population, which is already struggling with the economic effects of the pandemic, according to CAIT and the IFA. 

The organisations also asked the Union Minister of Commerce and Industry Piyush Goyal to make Bureau of Indian Standards rules only applicable to footwear costing over Rs 1,000 a pair. They argued that 90% of Indian footwear is carried out by cottage industries and that it is challenging to apply BIS standards to small manufacturing units. 
 
According to CAIT and the IFA, India is the largest footwear manufacturer in the world and makes up 9% of the global annual footwear production. Over 30 lakh people work in footwear manufacturing and trading in India and there are over 10,000 manufacturing units in the country, according to the organisations.