The Hindu Business Line : Footwear, components sectors hail excise cuts

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Kolkata March 4 Both domestic footwear players and component manufacturers have welcomed the steps announced in the Union Budget as auguring well for the sector in the immediate term.

According to Mr Adarsh Gupta, Executive Director, Liberty Shoes Ltd, reduction in the overall rate of excise duty on plastic raw materials and cut in peak customs duties should give a boost to Indian non-leather footwear industry in the international markets. He, however, felt that the imposition of service tax on rental of leased space occupied for retail sale would badly hit the retail industry.

Sounding happy over the excise sops, Mr Mani Almal, President, Indian Footwear Components Manufacturers Association, told Business Line that "higher rate of excise duty on domestic producers coupled with customs duty, CVD and VAT-free imports allowed to exporters at 3 per cent has been affecting the growth of the footwear components sector."

In Budget 2007-08, the Union Finance Minister has slashed excise duty on footwear parts from 16 per cent to 8 per cent, fulfilling one of the long-standing demands of the association. He said an estimated Rs 200 crore worth of domestic produce was expected to benefit instantly, besides providing support to the expansion plans of the components sector in the area of finished components.

Mr Almal said this should help both manufacturers of components such as soles, heels, insoles, stiffners etc, and also the footwear manufacturers. Footwear parts are those, which are cut to shape and size for specific end-use applications. He said manufacturers source intermediate products in the form of `sheets' and make insole, toe, counters etc in-house. Shoe last, adhesives, eyelets and fittings, linings and interlings, which have substantial usage in footwear, are separately classified, he pointed out.

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