18% tax slab hardens print opposition to GST recommendation

The printers are, however, not happy. They are demanding that the GST rates be reduced to 12%.

Kamal Chopra, president of All India Federation of Master Printers said that while on the one side printers are happy that their long-standing demand for one-trade-one-tax has been accepted by the GST council, on the other side, the 18% GST on printed products can prove to be a big jolt for the already suffering printing and packaging industry.

Previously there were three GST slabs in the printing industry – 5%, 12% and 18% on different products. Hence, the printers of the country were facing a lot of confusion while calculating GST for different items. Requests were raised at various platforms for a single slab GST on all the printing and packaging industry products. “With this proposal of the GST council though there may not be any confusion and anomalies while calculating GST for different printing products in the packaging segment, however, an 18% GST will devastate the commercial printers especially micro and small printers of the country who are already on the verge of collapse,” added Chopra.

According to Chopra, the printing and packaging industry is an intermediary because supplies are not made directly to the end-users but to the manufacturers/dealers preparing the products. “Any increase in the GST rate will increase the manufacturing cost of the products.”

He added that the basic raw material of our industry – paper, is in the slab of 12% GST. Putting printing and packaging in the slab of 18% means paying 6% more from the pocket after adjusting the 12% input credit. “As the industry is offering 60 to 90 days credit to its customers, the additional 6% will be a burden on the printer and will make it difficult for them to survive. It may prove to be another death nail, especially for the micro and small printers, who opted for composite tax and cannot avail input for their purchase.”

Chopra quoted a PrintWeek survey, revealing that at least 3,000 print businesses across India could go bust by March 2021. “The major reasons for this are insufficient cash flow and decreasing printing demand due to internet/digitisation printing of stationery, calendars, diaries, and books. Some of the State governments have already issued instructions for paperless offices. Again due to the Covid crises, the printing of newspapers and news magazines suffered a serious setback. The increase in GST from 12% to 18% will increase the prices of books, magazines, and other commercial print items. It will further reduce the demand for printed products.”

According to other reports in the media, 27.3% of companies were on the verge of closure due to decreasing demands. “With about 2,50,000 printers, India is the world’s largest printing industry. Out of this, 90% of printers are either micro or small, and this increase will affect their survival now. Therefore, we wish that there may be only one GST slab of 12% on all/any converting/printed products,” Chopra concluded.