Shoe manufacturers Bata and Liberty will benefit from the reduction in excise duty on shoes in the price range of Rs 250-750. The measure has, however, been accompanied by a reduction in the abatement from retail sale price for the levy of excise duty from 40 per cent to 37 per cent. This means that for a pair of shoes priced at Rs 750, the net excise incidence would decline from 9.6 per cent to 5 per cent. Liberty Shoes, which is planning a chain of stores called `Shoe Factory' targeted at the value-for-money segment, is likely to pass on some of the benefit.
BL Research Bureau
(This article was published in the Business Line print edition dated March 1, 2006)