Some footwear stocks made healthy gains on September 13 after media reports suggested that the government was looking to provide relief to the leather industry.
“The finance ministry is working with the department of industrial policy and promotion (DIPP) to provide incentives to the leather industry. The proposals include goods and service tax (GST) reduction and export sops,” CNBC-TV18 said in a report.
The labour-intensive industry has interests in export and domestic market and the government believes that an intervention could have a multiplier effect, the report added.
Khadim India rose 15 percent, Liberty Shoes 5 percent and Mirza International gained 4 percent in intraday trade. Bata India, too, was trading marginally in the green.The report added that the government was weighing a proposal to bring down GST rates on footwear that cost more than Rs 1,000.
While department for promotion of industry and internal trade and the finance ministry were in talks, it is the GST Council that will have the final say on rate reduction.
The finance ministry and commerce and industry ministry have jointly worked out a proposal for the sector and shared it with the PMO, a CNBC-Awaaz report said.
As part of the proposal, the government may consider increasing the 3 percent limit on duty-free imports to 5 percent.
The government may also reduce GST on raw materials for footwear, while another proposal could push for reducing the 18 percent GST to 12 percent on footwear priced above Rs 1,000, the report added.
News Source:- moneycontrol