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
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.”