Shares of footwear companies surged on Thursday, September 4, after the GST Council slashed tax rates on shoes priced up to ₹2,500. The decision sparked strong buying interest in the segment, lifting hopes of better demand and improved operating margins.

Campus Activewear led the rally, jumping 10% in intraday trade. Bata India rose 7% to a high of ₹1,255, while Metro Brands gained 6% to ₹1,242. Other listed players, including N B Footwear, Lehar Footwears, Khadim India, and Relaxo Footwears, recorded gains between 1% and 6%.

The GST Council, chaired by the Union Finance Minister, approved a reduction in GST on footwear priced up to ₹2,500 to 5%, down from 12%. Until now, the 5% slab applied only to products priced below ₹1,000. The expanded coverage is expected to make mid-range footwear more affordable for consumers and increase sales volumes for organised players.

The footwear rate cut is part of a sweeping tax overhaul. The Council simplified the GST framework by reducing four slabs 5%, 12%, 18%, and 28%—to just two, 5% and 18%, while introducing a special 40% rate for luxury and sin goods. The revised rates will take effect from September 22, coinciding with the start of the festive season.

With demand typically strong during festivals, the rate cut is expected to provide a near-term boost to footwear companies. Lower taxation on mid-priced products also strengthens the long-term growth outlook for the sector, as affordability expands for a wider consumer base.

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