New Delhi: The government is considering a proposal to increase entitlement rate to 5 per cent from the current 3 per cent for duty-free import of raw leather material as part of a booster to the labour-intensive leather sector, according to an official.
The proposal would help increase the availability of raw leather at lower rates to manufacturers.
At present, the entitlement rate is 3 per cent under the duty-free import scheme. Duty-free import material is used for making products for exports.
The official said that the demand to reduce GST on footwear priced above Rs 1,000 to 12 per cent from 18 per cent currently is also under consideration.
The leather segment is also demanding a cut in GST rate to 12 per cent from 18 per cent for raw material.
The chairman of Council for Leather Exports P R Aqeel Ahmed said that a lower GST on footwear would help increase the competitiveness of products in global markets.
Currently, the export of leather and its products stands at about USD 6 billion. Major export destinations include Europe and the US. The sector employs about 42 lakh people.
Leather and leather products exports dipped by about 4 per cent to USD 473 million in July.