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The
industry representative also urged the state government to
discuss this issue at level of Empowered Committee of
State Finance Ministers to promote the industry.
Unable
to face the competition from other states as well as
China, the industry, primarily spread in and around
Jalandhar, said that high rate of tax has compelled
companies to outsource components like shoe uppers, soles
and metal fitting from even China.
"It
is profitable to source footwear from China because of
high rate of VAT on what we produce here," said Nitin
Kohli, a shoe manufacturer in Jalandhar.
Terming
the increasing import from China as "major
jolt", he said, "The small scale industry here
has been forced to shift their business operations in
hilly areas like Himachal Pradesh and Jammu and Kashmir
where the union government has announced economic
package."
Painting
a "bleak" future for the footwear industry here,
an industry analyst opined the industry of Punjab worth Rs
250-300 crore would eventually vanish from the state
unless concrete steps are taken by state as well as union
government.
The
industry experts further said, "if the state
government reduce VAT rate of footwear, the tax compliance
in the state will increase which will lead to increase in
tax collection to state exchequer."
There
are almost 200 small scale units of footwear are in the
state.
Source
: Outlook (subscription) - New Delhi, India, dated
13/02/2008
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