The Leather and Footwear industry has urged the centre to fix lower Goods and Services Tax (GST) of five per cent to provide affordable footwear to the consumers and also for ensuring sustained growth and employment generation.
Besides, the Council for Leather Exports (CLE) officials urged the Centre to continue the duty exemption schemes including Duty Free Import Scheme, fix a lower slab for all other footwear and continue refund of GST and Customs Duty through Duty Drawback Scheme.
Mr. Rafeeque Ahmed, CLE Chairman said: “As the leather industry is aiming at increasing its export turnover to $9 billion (from present $5.85 billion) and its domestic turnover to $13 billion (from $6.50 billion) by 2020, there is a need to protect this industry as about 75 per cent of the industry is concentrated in MSME segment.”
Making an appeal to the Centre, Mr. Ahmed said: “The Government should consider fixing the 5 per cent GST rate for footwear by considering it as a common consumer item, so as to encourage Make in India efforts and to attract more investments – both domestic and overseas. Besides, the existing Central Excise exemption for footwear with MRP up to Rs.500 should also continue,“ he said.
According to him, the sector has an estimated annual turnover of over $12.35 billion (exports – $5.85 billion and domestic market – $6.5 billion) and provides employment to about 3.09 million people, 30 per cent of whom are women. Value added products (including finished leather) constituted almost 100 per cent of exports from the sector.
Mukhtarul Amin, CLE Vice- Chairman said: “The lower GST rate will facilitate at least 20 per cent annual growth of the leather and footwear sector on the domestic front, besides helping in generation of employment to at least five lakh people in the next 5 years. This will also help in successful implementation of flagship programme of the Government such as Make in India, Skill India etc.”
The leather and footwear sectors should be treated on par with textile items as essential lifestyle items and a lower GST rate should be considered for these sectors.
As the thrust of the Government now is to reduce inflation and remove poverty through employment generation, the leather and footwear industry sincerely hopes that its requests concerning GST will be favourably considered, he said.