Agra shoe traders stay on strike

Not impressed with the "marginal" rebate granted by the Uttar Pradesh government in the value-added tax (VAT) slabs for footwear last week, footwear traders of Agra have decided to continue their strike claiming that the tax rebate was insufficient and discriminatory towards the industry.

They are demanding full tax exemption on footwear that sells at a maximum retail price (MRP) up to Rs 300.

The strike, which entered its seventh day on Monday, has added to the woes of the cottage footwear manufacturers, who are ending up with loads of unsold products each day as the traders have not been buying any new stocks since January 1.

The chairman of Agra Shoe Factors Federation (ASFF), Raj Kumar Sama, said the decision to shift the footwear below a MRP of Rs 300 from the 12.5 per cent slab to 4 percent was only a 'hogwash'.

Aligarh locks and Varanasi silk sarees had been kept out of VAT as 'goods of local importance', the Agra footwear which was an indigenous product of the local leather workers had been brought under the "discriminatory" tax regime, Sama said.

He said that in all the neighboring states footwear selling for an MRP up to Rs 300 was kept out of VAT.

Also, the plastic footwear was placed under 4 percent VAT all across the country except UP, where it was subject to the Rs 300-MRP limit beyond which the applicable VAT slab was 12.5 percent, he said.

The traders would have to bear an additional 12.5 per cent VAT themselves on buying anything from unregistered cottage manufacturers, thereby adding to the final price-tags of footwear, Sama added.

Another 3 per cent VAT is applicable on inter-state trade of footwear, which would be credited back after about 13-14 months. "This unnecessarily blocks the working capital of traders," Sama said.

Meanwhile, the marble handicrafts manufacturers of the town are ecstatic over the state government's decision of exempting marble handicrafts from VAT.

The Agra Kirana, Color & Chemicals Merchants Association also ended its strike on Monday, after the state government reduced VAT on dry fruits from 12.5 per cent to 4 per cent.