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The Indian finance minister recently raised the Goods and Services Tax (GST) on printed products from a variety of levels such as 5%, 12%, and 18% to a uniform 18% on all print products. Much of the industry has protested through its associations that this level of GST on all products will adversely impact an industry that is already reeling from the Covid-19 pandemic. Commercial print and newspaper, magazine, and book publishing have been significantly impacted by the pandemic and the lockdowns of the education, travel, hospitality, and retail segments in particular.
For book publishing and book printing industries (already operating primarily in the lowest priced market in the world) the new 18% GST has become a show stopper. Since a publisher will now have to pay GST on the paper and printing cost at a rate of 18%, and also pay a GST of 12% on authors royalties, the publisher will wind up paying a considerable amount of GST without any hope of recovering or adjusting this (as reversal/input credit) against the sales of books to wholesalers, distributors, and retailers since there is no GST on the sale of books.
This becomes an added cost to the publisher without any hope of setting it off or adjusting it to the sale of his products. It will make it impossible for a publisher to produce cheaper books, as even the cheapest books will have to increase their retail sale price by at least Rs 50 or Rs 100 at the very least to cover their costs let alone to show any profit.
One remedy may be for the government to levy a 5% GST on all books including text and general books which will also help to quantify and govern an industry in which the statistics are poor and which has many small and unorganized players. A proposal and study to this effect had already been submitted to the GST council by one of the associations even before this new standardization of GST levies was introduced in October.
