How does the uniform 18% GST affect book publishing and printing?

GST rising for print

publishing and printing

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.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

It is the right time to support our high-impact reporting and authoritative and technical information with some of the best correspondents in the industry. Readers can power Indian Printer and Publisher’s balanced industry journalism and help sustain us by subscribing.

– Naresh Khanna

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