The All India Federation of Plastic industry, popularly known as AIFPI is a non-profit organization, registered under Societies Registration Act of 1860. It was established in 1985, having membership spread all over the country. The Federation is mostly devoted to the cause of the growth and development of Non leather footwear industry, manufacturers of footwear raw materials, components etc. in the country. The Federation represents the interest of Micro, Small and Medium Enterprises.
The footwear industry is the one of the maximum job providing industries to the common people who are doing the stitching, labeling, and packing of footwear by hand from their respective small houses, villages and small industrial areas. The footwear is one of the labor-intensive sectors, employing approximately 4.4 million workers, with maximum number of women. "The sector has a huge socio-economic benefit and creating a substantial number of jobs.
We would like to submit following few genuine points with regard to GST in order to enhance growth of the footwear industry.
1.To restore increased GST rates on footwear from 12% to 5%
We would like to submit that the GST on footwear has been increased from 5% to 12% having value up to Rs.1000/- w. e. f. 1.1.2022. The footwear manufacturers are making low cost non leather footwear like plastic/Canvas shoes, hawai chappal, sleepers etc. which are being used by poor people like farmers, women folks in the villages, school going children and Aam Aadmi etc. The footwear is a basic need of the human beings which is being used by them in their day to day life as such it is a necessity item for human being used over the centuries more than the readymade garments as well. GST on footwear may be applicable @ 5% at par with the readymade garments sector so as to help the small footwear manufacturers so that they may be able to increase employment in the sector.
The increase of GST from 5% to 12% resulting the increase in the value by 7%, which is a big blow on the back-bone of poor wearers. So most of the poor folk have either stopped wearing footwear or they have deferred their demand. This has resulted accumulation of finished stocks with the shop keepers and the manufacturer units and as such some of the tiny units of manufacturer have no other option but to stop their production or shut down their units causing unemployment as well.
Sir, before the GST regime, the low-cost footwear used by Aam Aadmi was exempted from VAT and Excise as well. It is submitted for your information that GST on footwear above Rs.1000/- is already @18%.So it is submitted that GST on footwear of the value up to Rs.1000/- may be restored to 5%.
2.Reduction of GST on (shoe upper) footwear component etc. (Chapter 64 from 18% to 12% reg.
No doubt that during 5% GST on footwear before date 1.1.2022, (as the GST on input of footwear Chapter 64 i.e. Footwear components etc. was mostly 18%) the Government had faced refund problem to the manufacturer of footwear of the value over Rs 1000/- per pair.
In his connection it is submitted that the GST on input of Footwear like shoe Uppers, Soles, Laces and other components etc. may be made under the purview of 12% GST only. This will not only solve the problem of refund, but this will help to the small & tiny domestic industries who manufacture shoe components by employing poor and women folks.
We would like to submit here that GST on footwear component (chapter 64) is at present 18%. The small and tiny units of footwear including the job workers having three four small machines are making footwear components in their small premises/household units. . The 18% GST paid on components is affecting these tiny and job workers. There will be very less refund in case GST is reduced to 12% on footwear components. .
It is requested that for the development of small scale industry, these points may kindly be considered in the ensuing GST Council meeting favourably as this will be beneficial not only to manufacturers but to the stockiest, retailers, consumers as well.. |
