Offset Printers Association warns: 2.5-million jobs at risk with GST hike

The Offset Printers Association (OPA), representing India’s printing and packaging sector, has issued an appeal to Finance Minister Nirmala Sitharaman to reconsider the proposed GST increase on paper and paperboard. While welcoming the GST Council’s decision to reduce tax on cartons, boxes, and cases from 12% to 5%, OPA cautions that the higher levy on paper will cripple 92% of the industry’s micro and small units. Together, these units contribute INR 1.2-lakh crore to the GDP and sustain over 2.5-million livelihoods.

OPA president Parveen Aggarwal stressed, “Printing and packaging are the silent engines powering education, FMCG, pharmaceuticals, retail, and exports. With packaging accounting for nearly 65% of India’s INR 80,000-crore paper market, the industry is interwoven with every household and every sector of the economy.” 

Aggarwal continued, “Imposing 18% GST on paper while keeping finished packaging at 5% creates a crippling 13% inverted duty structure. This imbalance will trap working capital, erode competitiveness, and could push almost 30% of micro and small units — the backbone of this industry — towards closure within just a year.”

General secretary Prof Kamal Mohan Chopra warned of the social impact: “Nearly 70% of India’s 250,000 printing units are devoted to producing textbooks and learning materials that shape the future of our nation. A GST hike from 12% to 18% on paper could increase schoolbook prices by 10–15%, directly burdening over 200-million students and millions of families.” 

Chopra added, “This comes at a time when households are already grappling with rising education costs and inflationary pressures. Such a move risks undermining the government’s vision of ‘Education for All,’ widening the gap between privileged and underprivileged children, and threatening the foundation of literacy, which is the backbone of national progress and social equity.”

A primary issue raised by industry stakeholders is the inverted duty burden, where an 18% GST on inputs versus a 5% GST on outputs could immobilise an estimated INR 5,000-crore annually in working capital. Operational strains are also reported, with refund delays of six to nine months impacting 80% of small enterprises, particularly those managed by single entrepreneurs. Furthermore, paper demand has declined by 5.6% annually since 2020, with an anticipated further drop of eight to 10% if GST rates increase.

Classification discrepancies are causing disputes for 60% of traders, notably the disparity between NIL GST on paper for exercise, graph, and laboratory notebooks and the 18% GST on similar grade paper used for textbooks and other stationery.

The OPA has appealed for several key changes. Firstly, they request a reduction of GST on paper and paperboard to 5%, aligning it with the rates applied to corrugated and non-corrugated paper/paperboard packaging. Secondly, OPA seeks uniform GST rates across all paper products to eliminate classification disputes. Thirdly, they advocate for extending the 5% GST to the entirety of Chapter 48 (paper and paperboard) to support micro-enterprises and reduce educational costs.

Chopra remarked, “We trust the minister’s vision to safeguard 2.5-million livelihoods and INR 1.2-lakh crore in economic value.” Aggarwal concluded, “This is about preserving the backbone of education and commerce for India’s future.”