Chennai Leather Market - August 2017

CHENNAI LEATHER MARKET

V. M. Khaleelur Rahman

Activities in the Chennai leather market are very slow which cannot be properly described in words.  Some of my tanner friends said that they were not able to sell anything since more than a month. The newly introduced GST (Goods and Services Tax) is also responsible for the present inactivity in the market. A lot of confusion is prevailing in the market. Taking this into consideration the Council for Leather Exports has decided to organise awareness seminars on GST “all over India” to apprise and educate the members about it in detail. Chartered Accountants and Financial Analysts are to make presentations during the seminars and clarify doubts of members about GST.

GST has five rates of taxes for Goods and Services. They are subject to Nil, 5%, 12%, 18% or 28% depending on the type of goods or services. Recently, gold and raw uncut diamonds have been classified under 3% and 0.25% GST. Export of goods and services are classified as ‘Zero Rated’.

	GST rates
Raw and Tanned Hides and Skins	5%
Finished Leather	12%
Leather Goods and Garments	28%
Footwear up to Retail Selling Price Rs.500 per piece	5%
Other Footwear and Components	18%
Wattle Extract, Quebracho Extract	5%
Other tanning Chemicals	18%,28%
Finishers, Polishes etc	28%
Job Work charges for processing of leather	5%
Other Job Work charges	18%
Effluent Treatment charges	18%

The above rates indicate the total of CGST and SGST rates. The division of the rates would be equal.

As stated above the Chennai leather market is very dull. However some tanners have sold their E.I. Tanned Goat Skins, Better Lining 5/7 sq. ft. at around Rs.52 and 4/6 sq. ft. at around 42 per sq. ft. Many tanners are having huge quantities of this item unsold as exporters of leather and leather products are not in the market for purchases.

Quotations of tanners are as follows:

E.I. Tanned Goat Skins

Grain selection: 5/8 sq. ft. Run/V Rs.90/95, V Rs.70/75, IF Rs.60/65, LIF Rs.50/55

Suede Selection: 5/8 sq. ft. Rs.45/46, 4/6 sq. ft. Rs.40/42

Lining Selection: 5/8 sq. ft. Rs.40/42, 4/6 sq. ft. Rs.36/37

Better Mesh: 5/8 sq. ft. Rs.30/32

Rejection Rs.14/16, Langda Rs.7/8 (All prices are per sq.ft.)

As far as raw goat skins are concerned, ruling prices are at around the following prices:

Miraj Rs.200, Ahmednagar Rs.150, Cadappa Rs.100, Hyderabad Rs.70 per piece

EXPORT CONTRACTS

As regards export orders for leather, there is no report of any fresh big contract. Some patchy business may have taken place. Generally speaking overseas customers are almost keeping quiet abroad due to holidays and other reasons. Leather exporters are endeavouring their best to have orders from as many sources as possible. The hard fact is that leather industry is passing through a very difficult period perhaps never witnessed before.

OFFERS OF EXPORTERS ARE AS FOLLOWS:

4/6 sq. ft. All Suede JY 195, LIF Suede JY 165, Rejection Suede JY 110

6/9 sq. ft. All Suede JY 210, LIF Suede JY 175, Rejection Suede JY 125

S/C OR F/C GOAT LEATHERS

Material	Size/sq. ft.	Substance	Selection	Price US$ per sq. ft. C&F
Goat upper leather	4/7	0.6/0.8 mm	ABC/DE	2.25/1.75
Goat milled leather	4/7	0.6/0.8 mm	TR-1	1.75
Goat suede leather	4/7 5/8	0.6/0.8 mm 0.6/0.8 mm	All Suede	2.00 2.10
Goat lining leather	4/7	0.5/0.7 mm	TR-1	1.70
	6/9	0.6/0.8 mm	TR-1	1.80

F/C SHEEP LEATHERS

Material	Size/sq.ft.	Substance	Selection	Price US$ per sq. ft. C&F
Sheep Cabretta leather	4/7	0.6/0.8 mm	ABC	1.95
Sheep Cabretta leather	6/9	0.8/1.00 mm	ABC	2.05
Sheep lining leather	4/7 5/9	0.5/0.7 mm 0.6/0.8 mm	TR-1 TR-1	1.60 1.70

Exporters say that the government should come out with sufficient incentives to boost our growth and exports which have come down considerably.  

(Writer's e-mail id: vmk1234@yahoo.com)