In an order which is set to boost the competitiveness of the leather industry in the state, the Uttar Pradesh government on Wednesday abolished the Mandi Parishad tax on raw leather. The order comes on the back of representations made by the leather manufacturers.
It may be mentioned that as per the existing Mandi Parishad Act, animal husbandry, including raw leather products in the state are governed by the Act but with a view to giving an impetus to the leather industry in the state, the UP government had, through an order in 2006, suspended the tax levy five years ago. But with the five-year relaxation period expiring on March 31this year, the UP Mandi Parishad once again, not only levied the tax rates afresh, but has also demanded the repayment of arrears.
Speaking to FE, RK Jalan, chairman of the Council for Leather Exports said that the Council had tried impress upon the government that this would worsen the condition of the leather industry in the state and had therefore asked for it to be lifted.
?The leather industry in UP provides direct and direct employment to around 1 million people in the state, which includes .5 million in the Kanpur-Unnao cluster and the remaining in the Agra and Noida clusters.
Levying 2.5% tax on the cost of raw hides would make the end product around 1.75% costlier and would thus hamper our possibilities in the international market.
By abolishing the tax, the government has not only conceded to the demands of this acutely labour-intensive sector but will actually help us make the sector more competitive in the international market.
The country on the whole stands to benefit if we get better and bigger export orders from the international market,? he said.