Budget Analysis: Decoding the knots and crosses

Kamal Chopra, general secretary of Offset Printer's Association responds to the impact of budget on the Indian print economy.

22 Mar 2012 | By PrintWeek India

According to you does this budget address any conditions pertaining to the print industry? If yes, which ones?
This time it is not a reformist budget and there is nothing which will benefit the printing and packaging industry in it. Rather with the introduction of service tax on printing, it may create some hurdles in the growth. Indirectly some money has been given under NBARD scheme for the industrial training of the working staff and for the entrepreneur development programme (EDP). But such measures are not enough while considering the development projects offered in other BRIC countries.
Has the budget covered any of our pre-budget recommendations?
I don’t think so.

If not, don't you think our industry is never given any importance?
May be we have not followed up on it properly. I can quote one example of Ludhiana hosiery industry and cycle part manufacturing industry; with strong following and lobbying they were able to get the desired relief.

Are there any indirect tax proposals directly affecting our industry?
Yes, with the introduction of negative list of 17 services, the ‘Printing Services’ now falls under the service tax slab. All services, pre-press, designing, labour jobs, lamination, etc. may fall under service tax now. It is for the first time that services in printing are being covered under the service tax with the result of which not only the product cost will increase, but the printers will have to maintain more books and records. The printers printing textbooks may have to suffer the most, previously there was no tax on the textbooks but now since the printing services will fall under the service tax the cost of text books will increase. I feel, AIFMP must take up the matter with the highest authorities otherwise the Indian printing industry is going to suffer a clear setback in competing with the other BRIC countries.

Do you think that the increase in service tax and excise duties would indirectly affect the cost of our inputs?
Definitely the cost of raw material is going to increase by 2% or even more and the customer may not be ready to bear the increase and the printer will have to withstand this increase at least for some time, which may adversely affect the input cost.

Wouldn't the increase in railway fares also adversely affect our cost of purchases?
Be it railway or the increase of fuel prices in the near future, the adverse effect will be on the industry and the cost of purchase is going to increase at least by 10 to 12 percent as per an estimate.

Do the small alterations in direct tax slabs affect us in anyway?
The small benefits given in the direct tax structure cannot be of any use for the industry, therefore, there may not be any major effect.

What would be the impact of the proposal to cover partnerships and proprietory under MAT?
Minimum Alternative Tax being imposed on the partnership or ownership companies may affect the small and micro printers adversely. Out of estimated 2,50,000 printers more than 82% fall in small or micro enterprises and introduction of MAT for these will definitely become a nightmare for such firms.

Multiple points of taxation continue. By when do you think the government will introduce the Goods and Services Tax(GST)? Will it be feasible?
Government is promising introduction of GST by August. But I feel, it is still a distant dream because all the state governments are not ready and structure of GST is still not very clear. It is too early to comment on the GST, but I don’t feel that GST in any way can improve the taxation system.

How would you rate the budget & why? Poor/ standard/ fair/ good

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