HSN Code for Footwear, Bags & Leather Products – Revised Slabs

Navigating the complexities of GST compliance is a common challenge for small business owners in India. From filing returns to generating e-way bills, every step requires precision, especially when it comes to classifying the products you sell. One of the most critical elements in this process is the Harmonized System of Nomenclature (HSN) code. For businesses dealing in everyday goods, understanding the correct HSN code for footwear, bags, and leather products is not just a procedural requirement but a cornerstone of accurate tax invoicing and compliance. This comprehensive guide is designed to simplify this process for you. We will provide a clear breakdown of the HSN codes for these popular product categories, including the HSN code for bags India, and most importantly, we will detail the revised HSN slabs for footwear to ensure you have the most up-to-date information for your business operations.

What Are HSN Codes and Why Do They Matter for Your Business?

Before diving into specific product categories, it is essential to grasp the fundamental role HSN codes play in the Indian tax landscape. Misunderstanding their purpose or using them incorrectly can lead to significant financial and legal repercussions for any business, regardless of its size. A solid foundation in what these codes are and why they are so vital will empower you to manage your GST obligations with confidence and accuracy.

Defining the HSN Code in the Indian GST Context

The Harmonized System of Nomenclature, or HSN, is a globally recognized system for classifying goods. Developed by the World Customs Organization (WCO), it acts as a universal economic language for products, allowing countries to categorize traded goods on a common basis. In India, the HSN code system was adopted and integrated into the Goods and Services Tax (GST) regime to bring uniformity to trade classification and streamline tax administration. Its primary role within the GST framework is to ensure that every product is identified systematically, which helps in determining the correct tax rate applicable to it. When you create a GST invoice or file your GSTR-1 returns, mentioning the correct HSN code is mandatory for most businesses. This systematic approach simplifies trade, reduces ambiguity, and makes the process of filing returns and claiming tax credits more efficient. Properly understanding HSN codes for bags in India or any other product is the first step towards seamless GST compliance.

The Cost of Getting it Wrong: Consequences of Incorrect HSN Codes

While it may seem like a minor detail on an invoice, quoting an incorrect HSN code can have serious consequences that ripple through your business operations. The most immediate risk is the miscalculation of GST. If you apply a code with a lower tax rate, you will underpay your taxes, which can lead to demands for the shortfall along with hefty interest and penalties from tax authorities during assessments or audits. Conversely, using a code with a higher tax rate means you overcharge your customers, making your products uncompetitive and potentially leading to disputes. Furthermore, an incorrect HSN code on your invoice can cause problems for your B2B customers, as they may face challenges while claiming Input Tax Credit (ITC). Such discrepancies can damage your business relationships and reputation. In the long run, consistent errors can flag your business for scrutiny, leading to detailed audits and potential legal disputes, draining your valuable time and resources.

The Complete Guide to the HSN Code for Footwear (Chapter 64)

Footwear is a vast and diverse category, ranging from simple rubber slippers to high-end leather boots. To bring order to this diversity for tax purposes, the GST system has dedicated a specific chapter in the HSN codebook. This section serves as a detailed footwear HSN code guide for India, helping you pinpoint the exact code for your products and understand the latest tax rate changes that affect the entire industry.

An Overview of HSN Chapter 64: Footwear, Gaiters, and Similar Articles

HSN Chapter 64 is the designated section that covers all types of footwear, as well as parts of footwear (like uppers and outer soles), gaiters, leggings, and similar articles. The codes within this chapter are structured systematically based on the primary material used for the upper and the outer sole. For instance, the initial codes like 6401 and 6402 deal with footwear made primarily of rubber or plastics, while 6403 focuses on footwear with leather uppers, and 6404 covers those with textile uppers. This logical structure helps businesses identify the most appropriate code by simply determining the main components of their products. Understanding this basic framework is the key to navigating Chapter 64 effectively and ensuring you apply the correct HSN code for footwear India.

Key Footwear HSN Codes and Product Examples

To make classification easier, here is a breakdown of the most common HSN codes under Chapter 64, along with examples of products that fall under each category. Using this as a reference can significantly speed up your invoicing process and reduce the chances of error.

HSN Code Heading	Description	Common Product Examples
HSN 6401	Waterproof footwear with outer soles and uppers of rubber/plastic.	Gumboots, rain boots, plastic monsoon footwear.
HSN 6402	Other footwear with outer soles and uppers of rubber/plastic.	Slippers, sandals, flip-flops, floaters, Crocs-style footwear.
HSN 6403	Footwear with outer soles of rubber/plastic/leather & leather uppers.	Formal leather shoes, leather boots, leather loafers.
HSN 6404	Footwear with outer soles of rubber/plastic & textile uppers.	Canvas shoes, sneakers, sports shoes, espadrilles.
HSN 6405	Other footwear not covered in the above categories.	Footwear made from materials like jute, wood, or cork.

Important Update: Understanding the Revised HSN Slabs for Footwear

One of the most significant recent changes in the GST landscape for this sector relates to the tax rates. Previously, the GST rate for footwear was based on its sale price, which created a dual-slab system. Footwear with a sale value below ₹1,000 attracted a 5% GST rate, while footwear priced above ₹1,000 was taxed at 18%. This structure often led to classification disputes and complexities in billing.

To simplify this, the GST Council corrected this inverted duty structure. Effective from January 1, 2022, a uniform GST rate of 12% is applicable to all footwear, irrespective of its price. This is a critical update and represents the revised HSN slabs for footwear. This change means that whether you sell a pair of slippers for ₹200 or luxury leather shoes for ₹5,000, the GST rate is now a flat 12%. Staying informed about these latest HSN codes for footwear and bags and their corresponding tax rates is crucial for accurate accounting and compliance.

Decoding HSN Codes for Bags and Leather Products (Chapter 42)

Beyond footwear, Chapter 42 of the HSN framework is equally important for businesses dealing in accessories like bags, wallets, and a wide array of other leather goods. This chapter provides a structured classification for these items, ensuring that everything from a simple wallet to a large travel suitcase is taxed correctly under the GST regime.

HSN Code for Bags India: Chapter 42 Essentials

HSN Chapter 42 is titled “Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut.” For most retailers and manufacturers, the most relevant heading within this chapter is HSN 4202. This single code covers a vast range of containers and carrying cases. It is further broken down into sub-categories to provide more specific classifications.

Here’s a look at the key items covered under HSN 4202:

• Trunks, Suitcases, and Briefcases: This includes vanity cases, executive briefcases, school satchels, and similar items.
• Handbags: This covers all types of handbags, whether with or without a shoulder strap, including clutches, wallets, and purses.
• Other Cases: The code also includes containers for specific items like spectacle cases, binocular cases, musical instrument cases, and camera cases.

It is important to note that the material does not necessarily change the primary HSN code. Whether a handbag is made of leather, plastic sheeting, or textile materials, it will generally fall under HSN 4202. The standard GST rate applicable to most items under this code is 18%.

HSN Codes Applicable in India for Common Leather Products

The term “leather products” extends far beyond just bags and footwear. Chapter 42 also provides specific classifications for other articles made from leather or composition leather, a topic where the leather products HSN code explained becomes essential for compliance. One of the most significant codes here is HSN 4203, which covers “Articles of apparel and clothing accessories, of leather or of composition leather.”

Here are some examples of products that fall under HSN 4203:

• Leather Belts and Bandoliers
• Leather Gloves (including sports gloves and protective gloves for all trades)
• Other Leather Apparel such as jackets and trousers.

As previously discussed, leather footwear is not covered here; it belongs exclusively to Chapter 64. The standard GST rate for most goods under HSN 4203 is 12%. Knowing these distinctions is crucial for businesses with a diverse product range, as applying a single rate to all “leather” items would be incorrect. A detailed look at the HSN codes applicable in India for leather helps ensure every product is invoiced correctly.

How to Find and Verify the Correct HSN Code

While this guide provides a solid overview, you may encounter products that are unique or difficult to classify. In such situations, it is crucial to know how to find and verify the correct HSN code using official resources. This proactive approach ensures you are always compliant and can defend your classification choices if questioned by tax authorities.

A Step-by-Step Guide to Using the Official GST HSN Search Tool

The Central Board of Indirect Taxes and Customs (CBIC) provides an official and easy-to-use HSN search tool on the GST portal. It is the most reliable source for finding the right code.

Here’s how to use it:

1. Visit the official CBIC-GST website. You can access the HSN search tool directly here: Search HSN Code.
2. Once on the page, you will see options to search by HSN code or by description. Click on the ‘Search HSN Chapter by Description’ tab.
3. In the search box, enter a description of your product. Use simple, clear terms. For example, type “leather shoe,” “handbag,” “canvas shoes,” or “leather belt.”
4. The tool will display a list of HSN chapters and headings that match your description. Click on the most relevant chapter to view the detailed codes within it.
5. Analyze the search results, read the descriptions carefully, and select the code that most accurately represents your product. You can also download the chapter notes for more detailed inclusion and exclusion criteria.

Mandatory HSN Code Reporting: Do You Need 4, 6, or 8 Digits?

The level of detail required for HSN code reporting on your invoices depends on your business’s Annual Aggregate Turnover (AATO). The government has defined clear rules to simplify compliance for smaller businesses while ensuring detailed reporting from larger ones.

Here are the current requirements:

• Businesses with an AATO of up to ₹5 crores: It is mandatory to use a 4-digit HSN code for all B2B (Business-to-Business) invoices. For B2C (Business-to-Customer) invoices, it is optional but highly recommended for good practice.
• Businesses with an AATO above ₹5 crores: It is mandatory to use a 6-digit HSN code for all invoices, including both B2B and B2C transactions.

The full 8-digit HSN codes are primarily used for the classification of goods during import and export and are required for filing Bills of Entry and Shipping Bills. For domestic transactions, a 4 or 6-digit code is usually sufficient.

Conclusion

Correctly identifying and applying HSN codes is a non-negotiable aspect of GST compliance in India. As we have seen, a simple error can lead to financial penalties and operational headaches. For businesses in the footwear, bags, and leather goods sector, the key takeaways are clear: Chapter 64 is your go-to for all footwear, and Chapter 42 covers bags and most other leather articles. Most importantly, remember the critical update that a uniform 12% GST rate now applies to all footwear, eliminating the old price-based slab system. Mastering the HSN code for footwear and related products is a fundamental step toward building a robust, compliant, and hassle-free business operation.

Feeling overwhelmed by HSN codes and GST filings? Let TaxRobo’s experts handle the complexities for you. From GST registration to accurate return filing, we ensure your business stays compliant. Contact us today for a free consultation!

FAQs: HSN Code for Footwear, Bags & Leather

1. What is the latest GST rate on footwear in India?

Answer: The current GST rate is a uniform 12% on all types of footwear, regardless of the sale price. This rule, effective from January 1, 2022, eliminated the previous slab system where footwear below ₹1,000 was taxed at 5% and that above it was taxed at 18%.

2. Is it mandatory to show the HSN code on an invoice for a customer who is not registered under GST (B2C)?

Answer: It depends on your business’s annual turnover. If your Annual Aggregate Turnover (AATO) is above ₹5 crores, you must mention a 6-digit HSN code on all invoices, including B2C ones. If your turnover is up to ₹5 crores, mentioning the HSN code on B2C invoices is optional but is considered a good business practice.

3. What is the HSN code for a non-leather handbag?

Answer: Non-leather handbags, such as those made of plastic sheeting, textile materials, jute, or canvas, also fall under the main HSN heading 4202. This code covers travel goods and containers of all types. The applicable GST rate for these items is typically 18%.

4. Where can I find the most authentic and updated list of HSN codes?

Answer: The official CBIC-GST portal is the most reliable and authentic source for all HSN codes and their corresponding GST rates. We strongly recommend always verifying codes there to ensure you are using the most current information. You can access it directly at the GST Portal.

5. What should I do if my product fits into two different HSN codes?

Answer: In cases of ambiguity where a product could potentially fit under more than one HSN code, it’s best to first consult the detailed chapter notes and section notes within the HSN classification. These notes often provide specific inclusion or exclusion rules. If you are still unsure, seeking advice from a GST professional like TaxRobo is the safest option to avoid future compliance issues and potential penalties.