Delhi government cancels tax on footwear

Protests after a proposed hike in value-added tax (VAT) on low-cost footwear have led to a U-turn by the Delhi State government. In his recent budget speech, Delhi’s deputy chief minister and finance minister Manish Sisodia had announced that footwear costing less than Rs500 (£5.24) – which had previously been VAT exempt – would attract a 5 per cent tax levy. Prior to the budget, shoes retailing at more than Rs500 had attracted a 12.5 per cent VAT charge. In his speech, Mr Sisodia had proposed a uniform VAT rate of 5 per cent on all kinds of footwear, irrespective of its price.

Several members of the Legislative Assembly complained about the proposal. Calling the new VAT levy an 'onslaught on common man', Vijender Gupta reportedly warned the Delhi government that if this tax proposal was not withdrawn, he would launch a state-wide agitation against it. The Delhi government quickly announced that it had decided to roll back the increase in VAT on low-cost footwear.
Delhi chief minister Arvind Kejriwal said: "We are proud of our U-turn, because it is in favour of the people… our government changed its decision within 36 hours for the sake of people."

Photograph above shows Delhi chief minister Arvind Kejriwal, who announced a reversal of the VAT decision.

Publishing Data

This article was originally published on page 4 of the May 2016 issue of SATRA Bulletin.

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