Agra’s footwear industry says GST will hit them hard

Agra: Members of Agra’s footwear industry who were looking towards the Goods and Services Tax regime with the hope that it would provide some relief to them are now up in arms against high tax slabs that will be rolled out on July 1. Now, members representing around 5,000 shoe factories in the unorganized sector along with 3,000 wholesale dealers, who are sitting on a three-day dharna since Saturday, have threatened to launch an indefinite strike from July 1.

Despite being among the priority sectors under Prime Minister Narendra Modi’s pet ‘Make in India’ initiative, shoe manufacturers said after implementation of the GST, the cost of production will go up by at least 20%, which in turn will push up prices of shoes. At present, tax on shoe components like laces and soles is 5% but under the GST, it will range from 12% to 28%. Moreover, the government has imposed a tax of 5% on shoes costing up to Rs 300 (in UP), which were tax-free so far.

Agra Shoe Factors Federation president Gaagan Das Ramani said, “Contrary to its promise made earlier, the government had not only imposed a tax on shoes priced up to Rs 500, it has also asked manufacturers to emboss the price on the product. Here we are talking about makers who fall under the cottage industry category and who are manufacturing shoes manually and not using heavy machinery. Moreover, the government has imposed a tax of 18% for shoes above Rs 500 instead of 12%. It will destroy Agra’s footwear industry, which has been here since the Mughal era.

“We want that shoes having MRP up to Rs 1,000 should be charged 5% tax, while it should be 12% for those above Rs 1,000. The provision of embossing the price on shoes is dropped. Moreover, the tax on shoe components should not be more than 5%. Shoes are a basic need of people like clothes and raising the price is not advisable. If our demands are not met, we will be go on an indefinite strike,” Ramani added.

Puran Dawar, president of the Agra Footwear Manufacturers and Exporters Chamber (AFMEC), said, “With GST, the production cost will go up by 20%, which is too high. The government should keep the footwear industry comparable with the apparel industry.”

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