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Representatives from the leather and footwear sector in India have requested a that a lower Goods and Services Tax (GST) be fixed so that consumers can have access to more affordable footwear, as well as to encourage sustained growth and employment creation.
The Council for Leather Exports (CLE) in India is said to have made a series of financial aid requests to the concerned authorities in India for the continuity of duty exemption schemes such as the Duty-Free Import Scheme, the refund of GST and Customs Duty through the Duty Drawback Scheme, as well as applying lower taxes for footwear.
Rafeeque Ahmed, Chairman, CLE told local media that “as the leather industry is aiming at increasing its export turnover to US$9 billion, from the present US$5.85 billion, and its domestic turnover from US$6.50 billion to US$13 billion by 2020, there is a need to protect this industry as around 75% of the industry is concentrated in Micro Small and Medium Enterprises (MSME) segment.”
According to Ahmed, the Government should consider fixing the GST rate at 5% footwear, hence, encouraging the ‘Make in India’ efforts and attracting more investments, both domestic and overseas.
The sector has an estimated turnover of US$12.35 billion, of which US$5.85 billion from exports and US$6.5 billion from the domestic market, and is said to employs around 3.09 million people, of which 30% are women. Value added products, including finished leather, reportedly constitute almost 100% of exports from the sector.
It is expected that not only a lower GST rate would facilitate at least 20% of annual domestic growth in the leather and footwear sector, but it would also help generate least 500,000 jobs within the next five years, in line with the Government’s objective of reducing inflation, removing poverty through employment.
Source: The Hinducomments powered by Disqus