With excise duty being halved from 12 per cent to 6 per cent, branded footwear priced between ₹500 and ₹1,000 per pair is expected to become cheaper by 2-5 per cent. Footwear companies such as Relaxo and Liberty catering to the mass market with products such as flip flops, sandals and floaters are expected to immediately pass on the benefits of lowered prices to its consumers.

Adesh Gupta, CEO, Liberty Shoes, said, “With excise duties getting halved , it is the aam admi that the government is indirectly addressing as footwear prices in the non-leather segment will come down by 2-5 per cent. The government has finally recognised that footwear is a labour-intensive category which gives millions of jobs.’’

Excise duty have been zero for footwear priced below ₹500 while excise duties above ₹500 have been varying every year.

Reduction in excise Gaurav Dua, Executive Director, Relaxo Footwear said, “There was already an abatement of 35 per cent for the footwear category which remains unchanged. The halving of excise duty at 6 per cent will lead to a net price drop of about 4 per cent and we will definitely pass on this benefit to consumers.’’

The reduction in excise duty will also create a level playing field with the unorganised players who do not pay taxes.

Lalit Kishore, Founder CEO, Globalite Footwear, said that the move will give lot of parity to players. “Yields will go up and inflationary pressures can be absorbed due to the reduced excise duty.’’

Anupam Bansal, Managing Director, Liberty Footwear, added, “The gap between the organised and unorganised sector will come down drastically.”

Shares of footwear companies gained as much as 10 per cent today after the Finance Minister proposed reduction in excise duty.

Relaxo Footwear surged 9.74 per cent, while Liberty Shoes inched to 8.50 per cent on the BSE. Similarly, shares of Mirza International Ltd soared 8.35 per cent and Bata India’s stock jumped 4.50 per cent.

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