Footwear industry seeks excise duty exemption

The footwear industry, which got a substantial relief in Arun Jaitley’s maiden budget, is disappointed that it has not been exempted from excise duty.

The industry, enjoying a decent annual growth rate and pushing for a chunk of the global market, had hoped the government would completely lift the excise duty to give a boost to growth of domestic and international markets. Instead, the budget just halved the excise duty from 12 per cent to six per cent on footwear with a price tag between ₹500 and ₹1,000.

After the Budget presentation, functionaries of the Confederation of Indian Footwear Industry (CIFI) petitioned the Finance Minister and other government leaders pressing for the exemption. “We urged them to at least lift the excise duty on footwearpriced below ₹1,000,” V Noushad, Vice-President of CIFI, told Business Line. “They were receptive to our views and we hope the issue will be considered favourably.” He said the CIFI pointed out that the footwear industry had a huge potential and that it was poised for a big leap. “We are sure that production can be increased by two or three times within a couple of years if the duty is lifted,” Nouhad said.

There is a large scope for export as China, the global market leader, is now facing a huge setback because of the sharp rise in its production cost, Noushad pointed out. “India can cash in on China’s shrinking share of the global footwear market if our government gives a thrust to the industry,” he said.

The labour-intensive footwear manufacturing units could not afford the complicated paperwork required for the excise duty procedure. The tax procedures held back many units from expansion and fobbed off new units from being set up. This was why, Noushad claimed, the halving of the excise duty would not help the industry much. CIFI, which represents leather and non-leather footwear and ancillary industries, has urged the government to treat the industry on a par with textiles.

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