New Delhi, 07 April (H.S.). The Confederation of All India Traders (CAT) and Indian Footwear Association (IFA) have demanded 5 per cent GST rate on footwear and implementation of BIS standard. CAIT and IFA have urged Finance Minister Nirmala Sitharaman to keep the GST rate at 5 per cent on footwear costing less than Rs 1000 and 12 per cent on footwear costing above as on 31 December. Along with this, both the organizations have demanded Union Commerce Minister Piyush Goyal to implement BIS standard only on footwear above Rs 1000.
CAT’s National General Secretary Praveen Khandelwal said in a press conference held in New Delhi on Thursday that increasing the GST slab on footwear from 5 per cent to 12 per cent will adversely affect the footwear industry and trade in India. He said the 7 per cent hike in the GST rate will directly impact the consumption of footwear and 85 per cent of the common people of the country, as a large number of small traders in footwear have opted for the composition scheme. Therefore, they will not be able to take input tax credit, which will add a further 7 per cent tax to the cost of footwear.
Khandelwal said that this would also go against Prime Minister Narendra Modi’s resolve to provide easy livelihood to the poor section, as 60 per cent of the country’s population wears footwear costing Rs 30 to 250. About 15 per cent of the population uses footwear worth Rs 250 to Rs 500. 10 percent people use shoes costing 500 to 1000 rupees. The remaining 15 per cent people buy good quality slippers, sandals or shoes manufactured by big footwear companies or imported brands.
CAT Secretary General said that India is the second largest footwear manufacturer in the world. There are more than ten thousand manufacturing units and about 1.5 lakh footwear traders spread across the country employing more than 30 lakh people, most of which are made very cheap and for foot protection. He said that like a house and clothes, footwear is also an essential item, without which one cannot step out of the house. In this, a large population are women working in the house, laborers, students and people from economically weaker and lower classes.
IFA National Secretary General Saurabh Bairathi said that 85 per cent of footwear manufacturers in India manufacture on a very small scale, which lack even the basic requirements of manufacturing. In such a situation, it will be impossible for them to follow the BIS standards set by the government of footwear. He said that India is a country of diversities, where people belonging to poor section, lower or middle class, upper middle class and upper class wear footwear according to their economic capacity. In such circumstances, the BIS norms should be applicable only if the price exceeds Rs.1000/-.
Both the organizations argued that about 85 per cent of the country’s population uses footwear worth less than Rs 1,000. Therefore, any increase in the rate of GST will directly hit 85 percent of the people of the country. He said that since 90 per cent of footwear is produced on a large scale by small and poor people in small scale industries and cottage industries running at home. This makes it extremely difficult to comply with BIS standards on a large part of the footwear manufacturing in India. In this regard, CAT and IAF have sent their memorandums to the Finance Ministers of all the states besides Finance Minister Nirmala Sitharaman to keep 5 percent GST tax slab on footwear. Therefore, CAT and IAF have urged that the GST rate and BIS standard not exceeding 5 per cent should be applied on footwear as both these steps will strengthen Prime Minister Narendra Modi’s call for self-reliant India and Make in India.