Government think-tank Niti Aayog is looking at tax-related issues, including inverted duty structure in three sectors of engineering, leather, and textiles, an official said on Monday.
The issues are likely to be taken up with higher authorities for their resolution to promote the growth of these sectors, the official said.
Industry representatives of leather and engineering sectors said that they have shared a list of GST (Goods and Services Tax) and inverted duty structure-related issues with the Niti Aayog.
"We expect the government to resolve those issues as it would help in promoting manufacturing and exports from the country," an industry official said.
The leather sector has recommended the reinstatement of basic customs duty on the import of wet blue, crust and finished leathers.
The exercise assumes significance as these three sectors are labour-intensive and contribute significantly to the country's merchandise exports.
The leather and footwear industry employs 4.42 million people and its exports stood at USD 5.26 billion in 2022-23. Engineering exports in the last fiscal aggregated at USD 107 billion, while the outbound shipments of the textile sector were about USD 36 billion in that fiscal year.
The Council for Leather Exports (CLE) has earlier stated that import duty exemption on wet blue chrome tanned leather, crust leather and finished leather has been removed due to which they attracts 10 per cent import duty.
This levy of import duty has caused the adverse impact on the industry, an industry official said, adding levy of import duty will affect our long business tie-ups with the brands and these brands will move away from India.
"Many brands are proposing to shift their sourcing from China to India, which will lead to substantial increase in exports in the coming years. However, levy of 10 per cent import duty on leathers has affected our price competitiveness, leading to shift of business of the emerging business opportunities from China to our competing countries like Vietnam, Bangladesh, Indonesia and Cambodia," the official added.
The council has also requested for duty free import of certain footwear components such as goat and sheep lining, and leather soles; reinstatement of duty free import scheme; and changes in export duty and export policy on leathers.
