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May 28, 2025

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GST rates and HSN code 6404 for Footwear Uppers Of Textile Materials

India's regime of Goods and Services Tax categorizes an expansive list of commodities under certain HSN, that is, Harmonized System of Nomenclature numbers. For the classification under the case of footwear, footwear uppers made of textile material come under the required classification as HSN code 6404. Footwear uppers are main parts used in the manufacture of shoes and other types of footwear products, and their exact categorization under GST is important in ensuring tax harmony and pricing.

This article breaks down HSN code 6404, GST rates applicable to it, and the benefits to the footwear industry from this categorization. A brief mention of minor issues and a short conclusion will follow before we provide answers to some important FAQs for a better understanding among businesses and end-consumers.

Breaking Down HSN Code 6404 and GST Rates

The 6404 HSN code specifically deals with "Footwear Uppers of Textile Materials." Let's divide this further to better understand. A shoe upper is that portion of the shoe which covers the top and sides of the foot but not the bottom. The shoe layers contribute majorly to providing comfort, fashion, strength, and functionality to shoes.

Textile materials holding in the footwear uppers may include cotton fabrics, Canvas, Jute, Polyester, Synthetic textiles, and other woven or non-woven textiles.

These materials are selected since they provide flexibility, breathability, and simplicity in shaping in the production process. Goods classified under HSN code 6404 are:

Shoe uppers wholly of textile materials excluding soles

Pre-stitched textile components meant for use in making footwear

Footwear fully or substantially made of textile products

Footwear uppers that fall under the HSN code 6404 in the prevailing GST regime have a GST rate of 5%. The reason behind the concessional rate is to support the footwear manufacturing business, particularly small and medium businesses, that make use of textile uppers since they are affordable.

Why HSN Code 6404 is Important in the Footwear Sector

Indian footwear is among the most rapidly expanding industries, both within and outside India. Here, in the midst of stiff competition, the industry is searching for cost-effective, long-lasting, and desirable material to use for making shoes. Textile uppers prove to be a preferred option due to several reasons:

‍Cost-effectiveness: Fabric materials such as cotton, canvas, and synthetic are relatively less expensive compared to leather or synthetic uppers.

‍Ease of Customization: Textile uppers are easily printable, colored, or embroidered, thus allowing manufacturers to easily have more design freedom in creating fashionable footwear.

Comfort and Breathability: Text-based footwear is utilized in tropical countries such as India because it is more ventilated and comfortable for the consumer.

By duly categorizing such products under HSN code 6404, GST system eases compliance and achieves a single rate of tax across industries which are engaged in manufacturing and trade of textile footwear uppers.

Benefits of GST and HSN Code 6404 for Textile Material Footwear Uppers

Low Rate of Tax favors the Industry

The other major benefit lies in the use of a minimal 5% GST rate for footwear uppers that are fashioned from textile fabric. This tax concession translates in real terms into cost savings both for manufacturers as well as for traders. Manufacturers and traders having thin margins to begin with, especially in the MSME range, are hence able to charge their products competently without pushing the high burden on consumers.

Encourages Domestic Manufacturing

The Indian footwear sector is a large employment and growth driver. Keeping the GST on textile uppers low encourages domestic producers to manufacture cheap footwear. Small units, cottage industries, and indigenous brands are favored under this policy, aiding the Make in India mission and local jobs.

Simplified GST Compliance

HSN code 6404 gives a lucid explanation to classify footwear uppers made of textile materials. This gives a clear idea to businesses to file GST returns, prepare proper invoices, and claim Input Tax Credit (ITC) without ambiguity. The ease minimizes chances of legal confrontations or incorrect classification, which provides confidence to businesses.

Enhancing Exports and Foreign Trade

Textile-footwear, particularly sports and casual footwear, has high demand in international markets. Indian exporters will be able to take advantage of the reduced GST rate and get refunds on taxes paid through the zero-rated export scheme. Indian footwear becomes competitive in foreign markets due to this, drawing in foreign buyers and foreign exchange revenue.

Promotes Utilization of Eco-Friendly Products

Over the last few years, sustainable and green materials such as jute, cotton, and recycled materials have become more popular. Most textile uppers are constructed from these green alternatives. Such products made economically available through a reduced GST encourage the system indirectly to favor sustainable manufacturing processes, supporting common global environmental objectives.

Designers' and Manufacturers' Flexibility

Fabric materials are relatively easy to shape, print, and embellish as opposed to other materials such as leather. This makes footwear design easier to experiment with color, texture, and pattern at lower expense, with greater options for consumers and more sales possibilities for companies.

Suggested Read: Ladies Suits HSN Code and GST Rate - 6104

Minor Challenges and Drawbacks

Though the GST categorization under HSN code 6404 is generally a good thing, some challenges prevail, particularly for small businesses.

Early Classification Confusion

Companies new to GST compliance or not familiar with HSN codes can find it challenging at first to classify their products properly. It can be difficult to differentiate between textile uppers and upper materials of synthetic or leather. Misclassifying can result in the application of incorrect GST, which can attract penalties or audits.

Documentation Burden for ITC

In order to avail Input Tax Credit properly, enterprises have to keep precise, detailed invoices and documents for every purchase of raw materials, including textile uppers. For small manufacturers and traders without specific accounting personnel, keeping such records may appear cumbersome or time-consuming.

Lack of Awareness in Unorganized Sector

The footwear industry has a huge number of players in the unorganised sector, especially in rural regions. A large majority of them may not be aware of HSN code classifications or their advantages. Poor access to professional advice might result in errors while complying or opportunities for leveraging the lower GST rate going waste.

Conclusion

The low GST rate and HSN code 6404 for footwear uppers of textile materials give big relief to India's booming footwear industry. With a low GST rate of 5%, easy classification, and the facility to claim Input Tax Credit, manufacturers and traders get to function optimally while maintaining the affordability of their products. Even though there are slight administrative difficulties, the advantages of this classification easily exceed the disadvantages. By encouraging the production at home, improving the environmental practices, and boosting the foreign exports, application of the HSN code 6404 are contributory towards the overall shoe industry growth.

FAQs

What are the kinds of products classified under HSN code 6404?

The 6404 HSN code comprises footwear upper of textile fabric such as cotton, canvas, polyester, jute, or other woven and non-woven. It consists of stitched or pre-shaped cut pieces especially designed for footwear manufacturing.

Can GST be charged on raw textile material for manufacturing footwear uppers?

No, raw textile materials fall under other HSN codes according to their type (cotton, synthetic, etc.). HSN code 6404 is only applied when the textile material is processed and formed as a footwear upper, ready for assembly.

Can a manufacturer get a GST refund on exporting footwear uppers?

Yes, exports are considered zero-rated supplies under GST. Refund of GST charged on inputs such as textile uppers makes exports tax-effective for manufacturers.

How should small businesses properly classify their footwear products under GST?

Small businesses must use the official HSN classification list and seek advice from GST professionals or utilize GST return filing software in order to correctly classify and remain compliant.

Are the uppers of customized textile footwear charged at the same rate?

Yes, standard or customized, if the uppers are of textile material, they come under HSN code 6404 and are subject to a 5% GST.

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