GST on Footwear – Easier Said Than Done

By Deepak Kohli

The GST Council’s latest decision looks like a festive gift for footwear buyers: from 22 September 2025, GST on footwear priced up to ₹2,500 drops from 12% to 5%. On paper, that’s a clear consumer win. On the ground, however, the story isn’t quite so neat.

Brands: The Domino Effect

For the cut to truly benefit consumers, big domestic brands must take the lead by reducing MRPs. If they move, medium and small manufacturers will inevitably follow. That’s the chain reaction policymakers are hoping for.

But reality bites. Picture lakhs of pairs scattered across warehouses, retail shelves and distribution hubs. Re-labelling MRPs overnight? Impossible. Expect brands to allow old stock to sell through at current prices and introduce MRP adjustments gradually in new production cycles.

Distributors & Retailers: Between a Rock and a Bill

This is where uncertainty peaks. Should they stock up now at 12% GST or wait for the 5% rate? Input credit technically offsets tax differences, but the fear lingers: if MRPs later shift downward, will margins take a hit? And how will consumers react if price tags don’t drop immediately?

What Will Actually Happen

• Sept–Oct: MRPs stay put. Distributors and retailers enjoy healthier margins thanks to lower GST outflows.
• Nov–Dec: Big brands roll out revised MRPs, nudging the rest of the market to follow.
• Early 2026: Consumers finally begin to see meaningful price relief at retail counters.

The Bottom Line

The GST cut is undeniably positive, but its effects will trickle down rather than flood in. Distributors and retailers should plan smartly, not panic. Brands must provide clarity on MRPs to avoid confusion in the trade. A signature in Delhi can slash tax overnight, but the market operates on its own clock. The real test lies in whether the benefit reaches the end consumer, only then can this policy be called a success.

So, in this race, GST has already sprinted ahead. The question is: who takes the next decisive step – the brands, the trade or the consumer?