The Confederation of All India Traders (CAIT) and the Indian Footwear Association (IFA) have together urged the Ministry of Finance to maintain GST rates at 5 per cent on footwear priced below Rs 1,000. The government previously charged 5 per cent GST on footwear costing below Rs 1,000. However, later it increased the GST rate on all footwear, irrespective of price, to 12 per cent from January 1, 2022.

Around 85 per cent of Indian population buys footwear costing less than Rs 1,000 per pair, argued the associations. Hence, an increase in GST on this category of footwear would directly impact this population, already struggling with the economic effects of the pandemic, they added.

The organizations also urged the Commerce and Industry ministry to apply the Bureau of Indian Standards rules only to footwear costing over Rs 1,000 a pair. As 90 per cent of Indian footwear is made by cottage industries, application of BIS standards would make operations for these small manufacturing units more challenging.

According to CAIT and the IFA, India makes up 9 per cent 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.