New Delhi: In a move set to bring relief to millions of consumers across India, footwear and clothing priced up to ₹2,500 would soon become more affordable. The Goods and Services Tax (GST) Council, in its 56th meeting held on Wednesday, decided to shift these items from the 12% tax slab to the lower 5% slab.
Union Finance Minister Nirmala Sitharaman made an official announcement to this effect, potentially reshaping the affordability of essential goods for the common man.
Until now, only footwear and apparel priced up to ₹1,000 were taxed at the concessional rate of 5%, while items above this threshold attracted a 12% GST. The proposed change, discussed during the high-level meeting attended by finance ministers of states and Union Territories, will make a broader range of products more accessible to consumers. This decision is expected to not only ease the financial burden on households but also provide a significant boost to the footwear and apparel industries, which have been grappling with rising input costs.
A Game-Changer For Consumers & Industry
The GST Council decided on phasing out the 12% and 28% tax slabs entirely, with most products in these categories redistributed into the 5% and 18% slabs. This restructuring aims to simplify the GST framework, making it more consumer-friendly while encouraging growth in key sectors. For the average Indian shopper, this could translate into tangible savings on everyday essentials like shoes, slippers and clothing.
The decision comes at a time when inflationary pressures have strained household budgets, particularly for low- and middle-income families. By reducing the tax burden on affordable footwear and apparel, the government hopes to provide direct relief to consumers while stimulating demand in the retail sector. Industry experts have hailed the move as a potential catalyst for growth, predicting increased sales and job creation in the textile and footwear manufacturing hubs across the country.
What Lies Ahead?
The changes signal a progressive step toward making GST more equitable. The reduction in tax rates for footwear and clothing up to ₹2,500 is expected to resonate strongly with consumers, particularly in rural and semi-urban areas, where affordability is a key concern. Moreover, the simplification of tax slabs could pave the way for a more streamlined GST regime, reducing compliance burdens for businesses.
As India moves toward a more inclusive economic framework, this reform underscores the government’s commitment to balancing consumer welfare with industry growth. Shoppers can look forward to stretching their budgets a little further, while businesses gear up for a potential surge in demand.