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18% GST on footwear reduced profit for small manufacturers

23
Nov '19
Pic: Shutterstock
Pic: Shutterstock
As Indian customers are highly price sensitive, manufacturers of footwear—a highly capital-intensive business with tight profit margins—were pushed to absorb the 18 per cent goods and services tax in a way as not to cause a sudden increase in product prices, which further reduced profit margins for small manufacturers, says footwear seller Aprajita Toor.

Toor sells footwear for women with her namesake label.

Although the Indian government allowed input credit, footwear manufacturing being more labour-intensive as well, this benefit did not translate into much saving for manufacturers, she told Fibre2Fashion in an interview.

The footwear industry has been requesting the government to consider reducing the GST rates on footwear to 12 per cent to allow the industry to continue growing and be able to improve its position in the global market, she added.

For the full interview, please click here.

Fibre2Fashion News Desk (DS)


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