Highlights of Union Budget 2015-16.

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28th February 2015

Members of the Council

Sub : Highlights of Union Budget 2015-16

Dear Member

As you are aware, the Hon’ble Union Minister of Finance announced the Union Budget 2015-16 today. As far the leather industry is concerned, the major announcement is the excise duty reduction for footwear as detailed below.

Excise duty on leather footwear (footwear with uppers made of leather of heading 4107 or 4112 to 4114) of Retail Sale Price of more than Rs. 1000/- per pair reduced from 12% to 6% (This has been notified vide Serial No. 180- A of Central Excise Notification No. 12/2015- Central Excise dated 1st March 2015).

For the purposes of the above exemption, leather footwear means footwear, classified under Tariff Heading 6403 or 6405, having uppers of leather, where leather refers to goods of heading 4107 or 4112 to 4114. This concessional rate of 6% would however not apply to footwear with leather sole and textile uppers falling under CETH 6404.

Footwear, including leather footwear, of Retail Sale Price upto Rs. 500 per pair and those with RSP exceeding Rs. 500 per pair but not exceeding Rs. 1000 per pair will continue to attract NIL and 6% excise duty respectively. Notification No.12/2012- Central Excise, dated 17th March, 2012 as amended by notification No.12/2015- Central Excise dated 1st March, 2015 [New S. No. 180A] refers.

The abatement for footwear as a percentage of Retail Sale Price is being reduced from 35% to 25% for all footwear. Notification No.49/2008-Central Excise (N.T.), dated 24th December, 2012 as amended by notification No.3/2015-Central Excise (N.T.) dated 1st March, 2015 [S. No. 56] refers.

There is no change in the Basic Customs Duty (which will remain at 10%) but Central Excise Duty is being increased from 12.36% to 12.5% ( by subsuming the education cess) and Service Tax Rate is being increased from 12.36% to 14%. The detailed highlights of the Union Budget 2015-16 is enclosed.

Members may kindly note the above.

Thanks and regards

R. Ramesh Kumar
Executive Director

Union Budget 2015-16 | Circular1