Industry & Economy
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Leather
Leather footwear cos seek parity on tax treatment
Our Bureau
New Delhi
,
April 5
FOLLOWING the implementation of the value-added tax (VAT) regime, prices of leather footwear could go up by 8-10 per cent on account of higher incidence of taxation, according to the leather sector players.
Seeking parity with the 4 per cent VAT levied on the garments sector, industry players have said the 12.5 per cent VAT rate on leather footwear would have an inflationary effect on the selling price of their products of over 8 per cent.
"Under the VAT regime, the taxation rate for garments is 4 per cent as against a 12.5 per cent rate on leather footwear. Besides, there is an excise of 9.72 per cent on leather footwear, while there is no excise on garments, despite both items being bare necessities," Mr Kuruvila Kuriakose, Director (Finance) of Mirza Tanners Ltd, said.
He said that the sales tax being levied by States on footwear was around 8 per cent, which is being levied on the first point.
As against this, the VAT rate of 12.5 per cent on maximum retail price would translate into an inflation of around 8 per cent to 10 per cent on the selling price of leather footwear, he said.
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