Job work rates for parts of footwear

[Murari Agrawal]

We are manufacturing parts of footwear like shoe soles & shoe uppers and charging 5% GST under SAC code 9988. Pl let know if it is correct and the relevant notification for this. Thanks

[Rajagopalan Ranganathan]

Sir,

Parts of foot ware is classifiable under the heading 6406 attracting CGST 9% and SGST 9% vide Sl. No, 171 of Notification No. 01/2017-CT (Rate) dated 28.06.2017 as amended.

[Murari Agrawal]

Yes Sir, but I suppose that is for sale under HSN 6406. I wanted the rate for Job Work under SAC code 9988, where I have been told the rate is 5% for leather & Footwear chapter 64, but does that mean complete footwear or the parts also. Kindly clarify. Thanks

[KASTURI SETHI]

In this scenario, if job-work is performed for registered person, rate is 5% otherwise 18%. See Circular No.Circular No. 126/45/2019-GST, dated 22-11-2019 read with Notification No. 20/19-CT(R) dated 30.9.19 amending Notification No.11/17-CT(R) dated 28.6.17 (serial No.26).

[Murari Agrawal]

Thanks Sri Kasturi Sir, I just wanted to confirm that foot wear as mentioned in the relevant notification also mean the parts of footwear which goes as "[(ea) manufacture of leather goods or foot wear falling under Chapter 42 or 64 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975) respectively;]" If that be so, the rate of 5% is correct for supply to registered person.

[KASTURI SETHI]

Yes. Parts of footwear are also covered.

AI Summary

GST on job work for footwear parts: concessional rate applies for supplies to registered persons, higher rate applies otherwise.
Parts of footwear, including shoe soles and uppers, are treated as footwear for tariff classification and, for job-work performed for a registered person, the concessional job-work GST rate applicable to the leather and footwear sector applies; job-work for unregistered persons attracts the higher standard rate. Notifications and circulars confirm that parts of footwear are covered by the concessional treatment when supplied to registered persons.