On 8 July 2019, the Indian Newspaper Society (INS) requested the central government to withdraw the 10% customs duty imposed on newsprint, uncoated paper used for printing of newspapers, and lightweight coated papers used for magazines. The request follows the announcement of the tariff on imports of these publication papers by the finance minister Nirmala Sitharaman while presenting the Union Budget in parliament on 5 July 2019.
The new import duty which takes effect as of the date of announcement itself means that the import of newsprint and lightweight coated papers will have to pay in addition to 10%, a cess of 1% and the 5% GST for a total tariff of 16.5% on the value of imports. This is in effect an increase of 11.5% on the earlier 5% GST that was applied since newsprint and lightweight coated papers attracted zero customs duties. The new customs duty on newsprint and LWC papers brings these on par with all other paper imported such as coated papers and boards used in book printing and other commercial sectors.
The INS has cited a litany of woes that have beset the newspaper and magazine industry with flat circulation and advertising growth. According to it, ABC circulation figures for newspapers from January to June 2018 show that the combined circulation of Indian newspapers grew only by 2%. It is claimed that while print circulation revenue grew by 1.2% in 2018 to reach Rs. 8,830 crore, print and digital ad revenue combined decreased by 1%, to Rs. 21,600 crore. It is also apparent that print advertising is migrating rapidly to diverse digital platforms, including social media.
The INS statement said, ‘Publishers of newspapers and magazines are already reeling under severe financial pressure due to many factors like lower advertisement revenues, higher costs and digital onslaught from technological giants. Small and medium newspapers will go into deeper losses and many of them will be forced to close down.’
The total consumption of newsprint in India was cited at an estimated at 2.5 million tons annually, while the domestic newsprint production is 1 million tons. At the same time, there is no manufacturing of uncoated and lightweight coated paper in the country.
According to the FICCI-EY media and entertainment industry report 2019, print media grew by only 0.7% in 2018 reaching Rs. 30,550 crore. At the same time, digital news consumers grew to more than 270 million, an increase of 26% over the 2017 figure. Page views grew 59% and average time spent on digital news almost doubled to 8 minutes a day in 2018, over the previous year.
Tax on democracy
Other representations on this matter requesting the reverse of the customs duty have been made by non-profit organizations committed to right to information and democratic practices, implying that the new tax is a tax on democracy. On behalf of small and medium newspapers, Rajya Sabha member of parliament Nadimul Haque, who is also owner of Kolkata-based Urdu daily Akhbar-e-mashriq, has written to the finance minister saying, “Customs duty on Newsprint will create big problem on financial health of small and medium newspapers, who are already suffering on account of low revenues.”