18% GST hike spells doom for the industry

By 01 Dec 2021

D Nagarjuna, retired HOD, Govt Institute of Printing Technology and former assistant professor, St Joseph's Degree & PG College, Hyderabad, argues that the government should revert to the earlier GST rates of 5-12% to save the industry from the brink of disaster.

Sravya Graphics, Hyderabad. Photo provided by D Nagarjuna

Print remains the most credible media when compared to other broadcast or telecast media. Today, books, newspapers, magazines, etc are seeing a revival, particularly in India, after users have identified the economical, logistical and technological demerits of other media, including online. There are many instances when readers use both print as well as eVersion of documents, books, newspapers, and magazines. A software engineer claims he has, ergonomically speaking, more comfort in reading, for instance, his manual or handbook in print than the digital one. Unfortunately, the production cost of a newspaper is already in the red though they struggle to compensate with revenue from advertisements and circulation. So is the case with other printed products, where they don't even have any advertising revenue.

A good example of the dominance and dependability on print media can be traced to 500 million printed copies of Harry Potter, which were sold in 2020 alone. Amazon alone can vouchsafe the magnitude of book printing from their sales record. Book shelves are back to full occupancy and they are no more fashionable showpieces. Research has proved that printed material is regaining its need with speed, considering the ease and convenience with which it can be read. Just imagine, in a population of over 135 crores in India, even 1% rise in literacy will result in a demand for 1.3 crore printed materials like textbooks, notebooks, etc.

Print media has sufficient gatekeepers compared to all other media. As a result, the content generated through print media not only has a lasting value, but also has the highest credibility. In light of this, the publishing world is getting back to optimum production of printed material.

Unfortunately, the Central government has increased the GST from 12 to 18% from October 2021 for all cartons, boxes, bags, packing containers of paper, miscellaneous goods of paper, such as cards, catalogue, printed material and other related items. This steep rise is a heavy blow to small, medium and large printing presses and the chain reaction affects the poorest of the poor who depend on printed books, newspapers and magazines.

The printers want 12% GST on all converted and/or printed products. They say that 18% GST is devastating and will spell a doom for the industry.

The reduction of GST will, in turn, benefit the governments which supply textbooks free of cost to millions of school children or packaged food as part of their mid-day meal scheme.

The unjustifiable rise in GST would spell total collapse of publishing industry which is already suffering from cutthroat competition, besides steep rise in production cost. The press owners are on the verge of closing down the presses and seek alternate business ventures as the former have proved counter-productive.

One should note that printing and packaging go hand in hand. Both of them are inseparable like Siamese twins. Every product we buy is linked to printing or packaging or both.

During the pandemic, we have seen doctors, nurses, para medical staff, police, etc as Covid warriors. Missing from the list are the unsung heroes of the printing and the packaging industry who sacrificed a lot by working 24x7 for the pharma and other ancillary industries in the areas of flexible and rigid packaging.

The retail supermarkets are the best example of proving how printing and packaging are inevitable and any rise in GST prices is passed on to the consumer, who is already crushed under the heavy weight of fuel prices. Retail markets are turning out to be wholesale markets and the poor buyer, to save cost on packaging, buys a five-kilo flour packet than a one kg packet, and ends up wasting the material, as this quantity is not needed for him in the first place.

The government should, in fact, go out of the way in encouraging this industry in particular because it encompasses all other industries who have no choice than to print, display, pack, preserve and dispatch their products. Adding to the problem of printers is, not settling the GST claims in time and affecting the cash flow of all these cash-starved presses.

The earlier the government saves this industry, the better it is for millions who get their livelihood from lakhs of printing presses scattered all over the country. This is all the more urgent as only now after a severe beating due to pandemic, life is returning to normalcy and so too for printing industry like other industries.

The government should immediately gather the inputs from all printing associations, including the All India Federation of Master Printers (AIFMP) and take immediate action to save the industry from the brink of a disaster, putting thousands on the road and swelling the unemployment figures.

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