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Footwear manufacturers demand reversal of GST hike

The 12 % hike came into effect on January 1

Footwear manufacturers in the country are demanding reversal of the GST hike that came into effect from January 1, saying that higher rates will affect the common man.

V. Noushad, Managing Director of Walkaroo and vice-president of Confederation of Indian Footwear Industries, told The Hindu on Friday, in the last one year, footwear prices rose 20 % approximately because of higher input costs. The GST rate earlier was 18 % for footwear priced above ₹1,000 a pair and 5 % for those priced less than ₹1,000 a pair. Now, the rates were revised to 12 % for footwear priced less than ₹1,000 a pair and those priced above ₹ 1,000 would continue to attract 18 % GST.

The revision had resulted in straight 7 percentage point hike in prices for the common man.

The dealers were refusing to take delivery of goods now as the stocks with them would have to be sold at higher GST and this would result in loss to the traders. Footwear made of synthetic leather, synthetic rubber and PVC were all priced at less than ₹ 1,000 and these were purchased largely by the economically weaker section.

The footwear producers were spread across States in clusters and most of them were in the small and medium-scale segment. There were also many in the unorganised sector.

The Confederation was in talks with the government seeking reduction of the GST to earlier level.

At a meeting of footwear manufacturers associations and footwear traders associations on Thursday, it was decided to reject the proposed increase of GST. The industry and trade would now take up the issue at the appropriate level in the government to roll back the increase and keep the GST rate at 5%, he said.

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