Footwear priced up to Rs1,000 per pair will become cheaper because of reduction in excise duty by six per cent as announced by Union Finance Minister Arun Jaitley in his maiden budget presented today, Punjab's footwear industry said.
"There is going to be a reduction in retail prices of footwear due to reduction in excise duty and this benefit will be passed onto consumers," Jalandhar based shoe maker and sports good maker Nivia Sports, MD, Rajesh Kharbanda said.
The actual benefit of reduction in excise duty on the footwear price of Rs 1,000 could be in the range of Rs 35 per pair, he said.
However, he said to claim benefit of reduced excise duty on low-cost footwear, manufacturers will be encouraged to bring down prices of footwear which cost more than Rs 1,000.
Union Finance Minister Arun Jaitley today announced reduction in the excise duty from 12 percent to 6 percent on footwear of retail price exceeding Rs 500 per pair but not exceeding Rs 1,000 per pair.
Welcoming the reduction in excise duty on footwear, Kharbanda said it was long desired by the industry and it would provide level playing field to manufacturers in organised sector.
"Several manufacturers had shifted from Punjab to neighbouring state Himachal Pradesh because of tax incentives.
But now duty reduction will give level playing field to industry in the state," he said.
However, a few manufacturers said the government should have announced duty reduction for footwear priced beyond Rs 1,000 per pair in order to provide impetus to this sector.
"Excise duty reduction should have been given for footwear carrying price more than Rs 1,000 a pair," said Sarup Industries Limited MD Amarjit Bawa.
Punjab's footwear sector is mainly concentrated in Jalandhar and a few units in Malerkotla and it produces 12,000 to 15,000 pair of shoes per day.
Meanwhile, Punjab's food processing sector hailed the Union Budget for reducing excise duty on specified food processing and packaging machinery from 10 percent to 6 percent.
"This step is going to attract more investments in Punjab's food processing sector," said International Fresh Farm Products India Ltd (IFFPIL), MD Sukhinder Singh.
IFFPIL had set up Punjab's first mega foodpark at Fazilka.
However, Akshay Bector, Managing director of Bector's Food Specialities said the government could have come out with a fund like Technology Upgradation Fund on the lines of Textile sector in order to boost investment in this sector.