The Hindu : Andhra Pradesh News : CPI seeks sops for footwear industry

Online edition of India's National Newspaper
Monday, Jun 28, 2004

Andhra Pradesh

Andhra Pradesh

CPI seeks sops for footwear industry

By Our Staff Reporter

HYDERABAD, JUNE 27. The CPI State council on Sunday urged the Chief Minister, Y.S. Rajasekhara Reddy, to rethink the Government's policy towards the footwear industry and extend a helping hand to it.

S. Sudhakar Reddy, MP and party secretary, in a letter to Dr. Reddy asked the Government to fix VAT at 4 per cent for all kinds of footwear, allow input rebate on all purchases of finished goods and raw material, considering country as a single entity, abolish the Central Sales Tax on introduction of VAT and merge all taxes with VAT.

The letter, which was released to the press, stated that the State Government, for various reasons, had doubled tax to 8 per cent at the first point of sale. With the advent of VAT it may even go up to 12.5 per cent. This would sound a death knell for the industry which, Mr. Reddy said, was already showing `serious signs of extinction.' This would mean not only loss of revenue to the Government, but also serious problems of livelihood for lakhs for workers engaged in footwear manufacture and tanneries. Besides, thousands of educated employees engaged in the offices concerned and outlets and many entrepreneurs would be affected.

Mr. Reddy stated that States like Delhi, Haryana, Tamil Nadu, Maharashtra and Gujarat were offering several benefits/concessions to the industry. "Whereas in our State, thanks to our unimaginative tax policies, many major public sector footwear factories have closed down and those in private sector have declined drastically. The tax burden is so heavy that raw leather is sent to Tamil Nadu from the State and brought back as tanned because the tax there is less," he said.

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