Newsprint manufacturers association welcomes 10% customs duty on newsprint

By 12 Jul 2019

While the newspaper publishers have vehemently opposed the imposition of 10% customs duty on the import of newsprint, saying that this will effectively force small and medium newspapers to shut down, the Indian Newsprint Manufacturers Association (INMA), on the other hand, has enthusiastically welcomed the move.

The INMA said the domestic mills has potential to serve the entire domestic consumption

“In the Union Budget 19-20, the government made a smart move by removing end use-based duty exemption to provide level playing with imports as well as to arrest all wrong doings in imports, in addition to duty which will accrue to the exchequer,” the INMA said in a press release.

According to the release, imported newsprint against USD 650-PMT in other parts of the world is made available at USD 450-PMT for Indian market. “The government delivered a bonanza by increasing advertisement rates by 25%. Print media termed it as growth accelerator. Today, at USD 450-PMT with removal offend use-based exemption. It is not a slap or blow but still a win-win situation for print media,” the released argued.

The INMA said it welcomes such strong and positive policy measure to boost the confidence of domestic industry, which will subsequently lead to the effective implementation of the nation’s dream of make in India. “The Indian industry is now fully geared up to meet the domestic demand,” it said.

The INMA said that the domestic mills has potential to serve the entire domestic consumption, and that since 2010, it has been clamouring for a level playing field with imports and their contribution for economic growth.

“Though the consumption and profits were growing manifolds in print media, our political masters continued to hold onto the age-old theory of providing tax soaps at the cost of domestic mills. As a result, more than half of the consumption was continuously getting imported and domestic industry, with the potential to cater to the entire domestic consumption, were left in the lurch with reduced half-capacity utilisation. Mills, which installed state-of-art technology to produce best newsprint, including all PSU, were pushed to the wall,” the release explained.

Earlier, the newsprint industry was in control of the public sector. For economic growth and rural and urban employment generation, the sector was opened up for private players in 1996 with the assurance of level playing field with imports by imposing 10% basic custom duty.

“However, the government kept encouraging import by lowering duty rates to keep print media in good humour. As a result, third parties observed loophole in import exemption and actively got engaged in imports and adopted malpractice through stock and trade model, a parallel industry, which started damaging the very existence of domestic mills. In 2006, when the revenue scam was unearthed (misuse of actual user condition), rather than imposing stricter norms, the erstwhile govt continued tax soap to the fourth estate and gifted them with duty exemption in 2009 on short term inflated impact of high import price. Immediately after duty exemption, imports price was bought down to the unsustainable level of below USD 650-PMT for domestic mills subsequently and duty-free cheap imports started eating more than 50% of the domestic capacity,” the release said.

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