Leather sector awaits Indian Budget 2005-06 on an optimistic note
24 Feb '05
2 min read
This could put more shine on the leather footwear segment and units manufacturing sports goods. In a bid to boost exports from these sectors, the government is considering a package of sops including reduction in customs duty on machinery used in processing of leather and manufacture of popular products like footwear.
Expected to be part of the forthcoming Budget, the package includes removal of the countervailing duty on tanning extracts made of vegetable oil and permission for duty-free import of inputs.
The current proposal is aimed at encouraging import of latest machinery for manufacturing of footwear and other leather goods. Such machinery should be added to the list of 34 types of specified machinery which are allowed for import at a concessional duty of 5%, according to the commerce & industry ministry.
No countervailing duty is imposed on this list of specified machinery which is primarily focused on the textile sector.
The proposal to the finance ministry is to add to the list 25 types of machinery used in the manufacture of footwear, both leather as well as non-leather. The current duty of machinery used by the footwear sector is around 20%.
Duty-free import of samples without any restriction should also be allowed, according to the commerce & industry ministry. Such imports can, however, not exceed one per cent of the FOB (free-on-board) value of previous year's exports. More items should also be added to the list of eligible inputs which are allowed at 3% concessional duty, the ministry has said.
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