Sri Lanka’s footwear manufacturers urge authorities to crackdown on illegal imports
Sri Lanka footwear and leather products manufacturers are urging the authorities to crack down on illegal imports of footwear and unassembled parts of shoes for assembly in Sri Lanka without much value addition and avoidance of CESS.
In a letter sent to President Mahinda Rakapaksa recently, the Sri Lanka Footwear & Leather Products Manufacturers Association has proposed to conduct raids on counterfeit footwear to safeguard the local industry.
File picture shows some women checking shoes at a recent trade fair.
The association has brought to the notice of the President that they have put forward a set of proposals to the Treasury and Deputy Finance Minister Dr. Sarath Amunugama to change the present tax structure for the benefit of local manufacturers well in advance to the Budget 2014.
But no action had been taken by the Treasury to find some redress for the industry which is now on the verge of collapse due to a flood of imported shoes in the market, the association said.
The proposals submitted by the association have been accepted at the pre budgetary meetings but later it was rejected at the last minute, members of the association alleged.
“Footwear and several other goods are imported without paying legitimate duty and dumped into the market and selling less than Rs. 500 when the minimum duty is Rs. 500. All the invoices are under invoiced and most goods imported are stock lots,” an association spokesman said.
Sri Lanka Customs should take stern action against smuggling of footwear and leather products as well as unassembled parts of shoes for assembly in Sri Lanka, he suggested.
He noted that manufacturers are urging the President to direct the Treasury to re-introduce the previous duty structure of 30 per cent import duty on CIF value or Rs. 1000 per pair whichever is higher.
Manufacturers have also suggested imposing a CESS of Rs. 500 and permit only the import of footwear against a letter of credit and to permit duty free import of quality accessories not manufactured locally.
The association has also asked for concessionary or interest free loans to fund on machinery tools, and working capital.
The duty reduction given for imported footwear from the 2011 budget has exerted an adverse impact on the local shoe industry especially for firms producing high quality, upmarket footwear, the association spokesman revealed.
The industry at present employs about 20,000 people directly and indirectly and includes 10 large export companies, 30 medium scale companies and about 3000 small scale manufacturers. A diverse range of modern shoes like canvass and rubber boots, thongs, sports shoes, leather shoes, etc are produced, using a variety of raw materials.