New Delhi: Footwear firm Liberty Shoes is looking at raising prices of majority of its products by up to 10% from September to offset higher tax to be levied on footwears costing above Rs500 under the GST regime.
“For Liberty, there is a potential price increase of 5-10%, particularly for leather shoes, which was taxed at a very rate earlier. There will be price increase on products priced Rs600 and above," Liberty Group CEO Adesh Kumar Gupta told PTI on the sidelines of CII-India Retail Conclave 2017.
Gupta said “there is enough stock available in the supply system at different levels and it will take three months to clear existing stock. There will be price increase from September, when peak season for footwear industry begins". In the new Goods and Services Tax (GST) regime, to be rolled out from 1 July, footwear below Rs500 will be taxed at 5%, while the rest would be in the 18% bracket.
Products priced Rs600 and above account for 85% of total sales of the company. He said that while there will be ‘turbulence’ in the footwear after GST implementation for six months, the GST will increase overall demand and consumption. When asked if this turbulence can hit its profits, Gupta said, “I can’t comment on this right now."