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Publishers not delighted; GST, rising paper costs bigger concern for industry

Monday, July 08, 2019

The government's decision to levy 5 per cent customs duty on imported books has not found much favour with the publishing industry, which feels ease in claiming GST-related benefits and availability of cheaper paper would have rather helped Indian publishers.

Finance Minister Nirmala Sitharaman had on Friday announced the duty hike on foreign-made books from nil to 5 per cent during her Budget speech, saying the move was aimed to encourage domestic publishing and printing industry.

"GST on uncoated and light weight paper was 12 per cent, now it is 10 per cent. This could have been a welcome move, but the other increments on the same segment will nullify this," said Aditi Maheshwari Goyal, executive director of Vani Prakashan Group.

She said the GST on printed books was nil earlier but now it is 5 per cent, fearing impact on sales of books.

"There is no mechanism to claim ITC (Input Tax Credit) - taxes paid by suppliers - the erstwhile VAT (Value Added Taxes). It was only electronic reproduction of intellectual property that was taxable earlier. Now, making printed books taxable at 5 per cent will highly impact that production and sales of the books," Goyal told PTI.

Satyanand Nirupam, editorial director of the Rajkamal Prakashan Group, stressed on the need for a collective action on a large scale that should be taken to promote a culture of reading, even as he voiced concern over rising cost of paper and its scarcity.

"I don't think levying 5 per cent custom duty on imported books is going to benefit our local publishers. If one really wants to help publishers here, the rising costs of paper should be brought down. The scarcity of paper should be addressed and removed," he said.

While some publishers felt it was too early to gauge the impact of the decision on the industry, others felt a vibrant marketplace that includes books from across the world would be good for readers.

"While the decision to levy custom duty on the import of books is going to affect the books industry, it is too soon to comment on the impact. We are evaluating the weight of this decision and how best to price our books going ahead," said Nandan Jha, senior vice president (product and sales) at Penguin Random House India.

Juggernaut publisher Chiki Sarkar said, "Indians should have access to all kinds of information and ideas and stories - not just Indian books. As a local publisher who makes homegrown books, I value being part of a vibrant marketplace where my reader can grow through all kinds of reading."

In her budget speech, the finance minister had also announced withdrawing custom duty exemption from various kinds of papers but did not mention their existing rates or other details.

According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the publishing sector in India is the third largest in the world in English language publishing. "Current statistics reveal that the sector is truly a colossus - a giant in slumber, which needs to be awakened and given its due status and identity," FICCI states on its website.

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