Footwear firm Liberty has recently made an announcement ahead of the biggest tax reform since independence GST. The company has announced a price hike of 10% to compensate the losses which will be caused by the implementation of GST.
Liberty Group CEO Adesh Kumar Gupta proclaimed “For Liberty, there is a potential price increase of 5-10 per cent, particularly for leather shoes, which was taxed at a very low rate earlier. There will be the price increase on products priced Rs 600 and above”. The prices will be increased by 10 per cent for the footwear costing above Rs 500 from September. In the new Goods and Services Tax (GST) footwears below Rs. 500 will be taxed at 5 percent while rest would be taxed in the 18 percent bracket.
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 the price increase from September when peak season for footwear industry begins”. He added that it would take six months to settle after the implementation of GST. While he is not sure about the profits the company will be making.