In­dus­try | CFLA

CFLA is de­ter­mined to change the sec­tor’s per­cep­tion by pro­vid­ing the stake­hold­ers with the rep­re­sen­ta­tion that they re­quire, when­ever they need it, at all pos­si­ble gov­ern­men­tal points. Such con­sis­tent and con­vinc­ing rep­re­sen­ta­tion has fi­nally de­liv­ered s

Shoes & Accessories - - Contents -

While spear­head­ing Lib­erty Group Adesh Gupta no­ticed that the footwear and ac­ces­sories re­tail sec­tor in In­dia had one of the most de­prived and ig­nored re­la­tion with the au­thor­i­ties. It was im­per­a­tive for him to en­sure that small and medium en­ter­prises (SMES) could ac­cess the cor­rect advice and rep­re­sen­ta­tion sur­round­ing tax­a­tion as well as work­place re­la­tions mat­ters. “Our goal is sim­ple. We want to help SMES suc­ceed by help­ing them build a solid busi­ness foun­da­tion. That starts with fair treat­ment to the re­tail and man­u­fac­tur­ing sec­tor. The au­thor­i­ties’ poli­cies and grants are most ev­i­dent in how it ad­min­is­ters the tax­a­tion, pol­icy norms and min­i­mum wages,” says Adesh, who is the Chief Ex­ec­u­tive Of­fi­cer of Lib­erty Shoes Lim­ited and the Chair­man of CFLA.

CFLA has mem­bers across the in­dus­try stretch­ing from South to as far North. Its core team ad­vises and

rep­re­sents the footwear and ac­ces­sories busi­nesses “be­fore they might even think they need help”. “It’s been a steep learn­ing curve,” he ex­plains. “You have to work out how to in­spire and lead, help­ing peo­ple to un­der­stand and be­lieve in the fu­ture that you are try­ing to cre­ate. You also need to work out which fights are worth fight­ing and which ones you need to let go, and move on from mak­ing sure you con­serve your en­ergy for the right mo­ments of im­pact so you’re not wast­ing your time.”

With his re­lent­less quest for fair treat­ment, cou­pled with his own val­ues and vi­sion res­onat­ing through each rep­re­sen­ta­tion of the coun­cil, CFLA is now the most im­por­tant body of its kind. Com­mit­ment is a value that Adesh has al­ways strived for and tries to bring to CFLA, stress­ing that he ex­pects every­one to com­mit first and fore­most to what CFLA is seek­ing to achieve as a team. He shares the progress and out­look of CFLA for 2018-19 with S&A’S Amit Cho­pra.

What is your opin­ion on GST rates for footwear & ac­ces­sories cat­e­gory as a coun­cil head rep­re­sent­ing var­i­ous sec­tions of the in­dus­try and as a re­tailer?

GST rates rec­om­mended by CFLA could have been a game changer for this sec­tor. But, un­for­tu­nately, again two tax slabs of 5% and 18% have yet again di­vided the in­dus­try and cre­ated an un­cer­tainty and con­fu­sion. Be­ing a highly la­bor-in­ten­sive in­dus­try, hav­ing huge man­u­fac­tur­ing over­heads, in­ter­est cost, rentals as well as re­tail­ers mar­gin re­quired to ab­sorb the cost of show­room rentals, cost of elec­tric­ity and main­te­nance, sales staff, show­room fur­nish­ing, loss of mar­gin dur­ing clear­ance/ end of sea­son sales, value ad­di­tion in case of footwear and ac­ces­sories is very high. So the present rates of GST are on much higher side and needs to be ra­tio­nal­ized.

Prac­ti­cally, the MRP of the footwear is in­clu­sive of GST, so bring­ing down the rate of GST to 5%, from ex­ist­ing level of 18%, for all type of footwear/ac­ces­sories would re­sult in re­duc­tion of ul­ti­mate cost to con­sumer, de­mand cre­ation and will help the in­dus­try to grow and for the suc­cess of Make in In­dia Ini­tia­tive. How­ever, the re­cent de­ci­sion by the gov­ern­ment to re­duce GST on footwear upto Rs 1000 by 5% is a sig­nif­i­cant step.

What are some of the chal­lenges, both short and long term, that you an­tic­i­pate go­ing for­ward?

The chal­lenges and concerns of the in­dus­try re­main the same, as they were 10 years ago. The same set of chal­lenges will con­tinue as the un­or­ga­nized sec­tor needs to in­te­grate into main­stream, col­lab­o­rate, com­ple­ment, sup­ple­ment rather than com­pet­ing with the or­ga­nized sec­tor. The in­dus­try needs to work on a hub-and-spoke model.

Did CFLA play an ac­tive role to rep­re­sent re­tail to the GST coun­cil & gov­ern­ment au­thor­i­ties?

CFLA has been ad­vo­cat­ing for the last 4 years and ac­tively rep­re­sent­ing at the State and Cen­tral gov­ern­ment au­thor­i­ties and GST Coun­cil. Hav­ing im­por­tance of a so­cio-eco­nomic sec­tor with huge la­bor em­ploy­ment po­ten­tial, the Footwear-leather Sec­tor needs hand­hold­ing and spe­cial at­ten­tion while fix­ing GST rate. CFLA had per­sis­tently given var­i­ous rep­re­sen­ta­tions with some jus­ti­fi­ca­tions for a sin­gle rate of GST of 5%. Make in In­dia ini­tia­tive was launched with a big fan­fare and was ex­pected to boost this sec­tor con­sid­er­ing that footwear sec­tor was cho­sen as the top pri­or­ity sec­tor and pre­sented to the Prime Min­is­ter dur­ing Make in In­dia Work­shop held on 30 De­cem­ber 2014.

Do you feel many in­ter­na­tional brands have en­tered In­dian re­tail post GST?

As In­dia be­comes one na­tion, one mar­ket and one tax rate, In­dia will be­come at­trac­tive mar­ket for in­ter­na­tional brands to

“One na­tion, one tax and seam­less bound­aries will be a game changer in the long run.”

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