Pre-budget: Leather industry hopes to get more tax relaxations
The leather industry, one of the leading revenue generators for Uttar Pradesh, is hoping to get more tax relaxations in the forthcoming budget to help gain dominance in the global market and also tackle Bangladesh market, a newest threat to Indian leather industry.lucknow Updated: Jan 31, 2018 14:53 IST
The leather industry, one of the leading revenue generators for the state, is hoping to get more tax relaxations in the forthcoming budget to help gain dominance in the global market and also tackle Bangladesh market, a newest threat to Indian leather industry.
Bangladesh, which has created special economic zones (SEZ), is offering facilities to leather industrialists and has started gaining orders in the global market.
It has also offered income tax exemption to new leather units for five years and has fixed different slabs of income tax.
Above all, it has relaxed labour laws for the leather industry.
“These offers are attracting leather entrepreneurs within the country and also from the outside the country,” said Mukhtarul Amin, chairman of the Council for Leather Export (CLE) Mukhtarul Amin.
While hailing the special package of Rs 2,600 crore by the government to the leather industry, Amin said, there were many initiatives still needed for the industry to tackle competition from Bangladesh.
The industry wants the government to make GST refund time-bound. “At present, none of the leather industrialists have received the GST return since its enforcement,” he claimed.
It also wants relaxations in labour laws and scrapping of taxes on job work, the one which has been outsourced.
“Due to imposition of tax on job workers, the petty workers have stopped taking job works and tanneries are under fiscal strain as they have to employ workers for petty jobs on higher wages,” said Taj Alam, president of UP Leather Association.
They also expect that the government should assist the industry in branding their goods in the international market.
“Despite the fact that the Indian leather industry has Rs 36,000 crore business volume, the branding of products have not been done in the global market,” Amin who also want Income Tax exemption on its exports income.
Similarly, under the duty free limit of leather garment imports the duty should be raised from three percent to five percent.