The Association of Indian Magazines (AIM) has urged the union government to either rollback the goods and services tax (GST) of 12% levied on lightweight coated paper (LWC) or bring it down to 5%. In a letter sent to Revenue Secretary Hasmukh Adhia on July 11, AIM President R Rajmohan batted for keeping the tax rate on LWC paper at a lower slab owing to its importance for the print industry.
“LWC is used by most magazines and paper constitutes over 60% of our production costs. While higher GSM coated paper is being used for various other purposes, lightweight coated paper (LWC) up to 70 gsm is only used by magazines and newspapers,” said the letter signed by Rajmohan. Going forward, the AIM intends to meet with Adhia besides approaching Union Finance Minister Arun Jaitley, I&B Minister Venkaiah Naidu, I&B Secretary NK Sinha and a few members of the GST council to push for the acceptance of their demands.
Under the erstwhile tax regime, publishers with the Registrar of Newspapers for India (RNI) numbers were exempt from any form of taxation on newsprint. They did not have to pay any central or state tax, customs duty, excise duty or value added tax on SNP (Siam Nippon Industrial Paper), GNP (Great Northern Paper) and LWC paper up to 70 gsm.
“However, as per GST, there is a 5% IGST on SNP and GNP and 12% IGST on LWC, on imports and an equivalent CGST plus SGST on domestic purchase,” wrote Rajmohan. Mentioning that the print industry is going through a slowdown due to a substantial rise in input costs, the AIM termed the treatment meted out towards the magazines as “extremely unfair”.
Referring to the Press & Registration of Books Act of 1867, the AIM asked for parity between magazines and newspapers since both come under the category of ‘newspapers’ under the aforementioned act. “Magazines are not just content but experiences. Taking into account this role played by the magazines in (the) dissemination of knowledge, our constitution has provided many concessions to magazines and were always treated on par with newspapers,” claimed the letter.
Sources informed exchange4media that there are a number of grey areas when it comes to the implications of the GST on the print industry. Among these is a supposed 5% GST levy on hiring professional transportation services for distributing newspapers and magazines. According to the sales head of a newspaper group, only some big newspapers have hired transportation vehicles whereas other smaller concerns are making use of private vehicles for distribution purpose. The source wondered whether such an arrangement would qualify as transportation service and be liable for taxation.