Leather Industry Asks for More from GST Council
100 days after implementation of Goods and Services Tax, the GST Council held its 22nd meeting in October, and came out with some encouraging changes. Tax refunds of GST for July will start from October 10, and for August from October 18. Second, exporters are now required to pay a nominal GST of 0.1 percent on the goods meant for exports. Third, extension of the Advance Authorization (AA)/ Export Promotion Capital Goods (EPCG)/100 percent EOU schemes. It is believed that these measures should help prevent working capital of exporters from getting locked up. Additionally, it is expected that the introduction of the proposed e-wallet facility would provide a permanent solution to this problem.
Though the council gave relief to the jewellery industry as well as to several small-scale industries, the footwear industry has been kept off this list despite its strong representation in the Finance Ministry. Underscoring this, Agra Footwear Manufacturers and Exporters Chamber President Puran Dawar told S&A,“THE footwear industry in Agra employs over 3.5 lakh people of the city, but the GST council ignored the industry’s valid demands. Smallscale manufacturers of footwear have been disheartened as they were hoping that this time the GST council will definitely hear their pleas.”
He added, “GST refund provisions do give some relief but it is very disappointing that leather has still been kept in the 12 per cent slab instead of bringing it down to 5 percent. Leather goods have also been kept in 28 per cent slab, which should have been kept at 12 per cent as demanded by the industry. There has been no reduction on footwear, wherein the industry has been demanding for 5% GST rate. The leather industry has been earning a considerable amount of foreign exchange, and if promoted well, the footwear industry alone could generate millions of new jobs.”
He stressed,”we are extremely disappointed. The apparel and textile industry has been getting all the benefits while the footwear sector is being ignored. Footwear is a part of any attire too. I wonder why the council is placing footwear and small leather accessories under luxury category. It’s a known fact that India has the largest livestock, and the 90% Industry falls under SME category, which needs handholding. So apparently we do not see any reason why the leather industry should be treated differently. We strongly urge that the leather industry be taken under the Textile Ministry.”