Notebooks to cost more even as GST reduced to zero

The Indian Paper Manufacturers Association (IPMA) has stated that the importers of paper and paperboard get an additional benefit after the new GST slab rate comes into force from Monday and called for the imposition of IGST (Integrated Goods and Services Tax) of 18 per cent on import of paper.

IPMA has argued that the domestic paper products, already under significant stress due to “predatory imports” of paper and paperboard entering the country at zero or preferential import duties, would further be more non-competitive.

Pawan Agarwal, president IPMA said, "Given the move to reduce GST on uncoated paper and paperboard used for exercise books, notebooks etc, (HS Code 4802) to nil, the IGST Rate on imports will also be reduced to Nil." He added, "While domestic manufacturers will have to embed input taxes in the cost of manufacture, exports by foreign manufacturers to India will not be levied any IGST, leading to a further increase in imports.

Agarwal pointed out, "While the GST Rate on pulp has been reduced from 12% to 5%, the GST rate on wood, which is the main raw material for manufacture of pulp, continues at 18%." This, as per paper industry experts, will prompt higher import of pulp, adversely impacting the livelihood of the Indian farming community, and result in a significant outflow of foreign exchange.

The association submitted a memorandum to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal, asking them to reconsider their decision and make the relevant changes to the GST structure, correcting the anomalies.

IPMA also expressed concerns about increasing the GST rate from 12% to 18% for different types of paper and paperboard grades. This will not only adversely impact the entire chain of downstream and user industries, but also impact the ultimate consumers with increased cost.

In the 56th meeting the GST on paper was increased from 12% to 18%, but notebooks remained at 0%. In 2024, one notebook (72-96 pages, A5) cost INR 20, now with a 6% hike plus paper cost, it costs INR 21.20-22. The cost of 10 notebooks has increased from INR 200 to INR 220-230.The point is, as paper becomes more expensive, notebooks and books will become more expensive – not cheaper.

Also, as PrintWeek has been notified by an industry leader from Ludhiana, "the reduction in GST rate to nil for uncoated paper and paperboard used for exercise books and notebooks will lead to a cost increase as manufacturers will become ineligible to avail input tax credit (ITC) on raw material and inputs, as well as services and capital goods."