Siddu urges modi to reduce GST on newsprint

Reducing GST helps RNI registered newspaper agencies.

Bengaluru, April 27: The print media including the book publishing companies have been bearing the brunt of substantial increase in the price of newsprint cost owing to pandemic, increase in petrol-diesel price and other factors. As if thats not enough, the recent ongoing war between Ukraine and Russia has added salt to the would.

This has forced several printing and publishing industry on the brink of closure.

Cinsidering the stress that the industry has been constantly facing despite serving the society at large, Karnataka opposition party leader Siddaramaiah has drawn the attention of Prime Minister Narendra Modi through a strongly worded letter asking him to bring down the cost of newsprint and the GST levied on the same.

The tax on printing paper for RNI registered agencies before GST was at 3%, and it was increased to 5% under GST system. This is an increase of 68% in taxes on printing paper. GST for unregistered agencies is at 12%. As there is no mechanism to differentiate between registered and unregistered agencies at purchasing point, the unregistered agencies are purchasing printing paper at 5% instead of 12%, creating shortage of papers for registered agencies. This shortage has also resulted in the increase in the cost of printing papers as well. The government has to consider reducing the GST rates for registered agencies and create a differentiating mechanism to identify registered and unregistered agencies, he said.

National and international macro developments have also contributed to the increase in cost of printing paper. Supply chain disruptions due to pandemic, labour shortage, raw material cost, shortage of shipping containers and fuel price hike have contributed to drastic increase in printing prices. The cost of one ton of imported printing paper was $300 or Rs.23,000 before the pandemic, and it has reached to about $700-$800 or Rs.55,000-Rs.60,000. About 56% of paper was imported and 44% was manufactured domestically.

Most of the imports are from Russia and Europe, and with the ongoing war the disruption has increased drastically. It has to be noted that most of the news paper agencies depend on imported papers for quality reasons as domestically manufactured papers are mostly from recycling process. Steps have to be taken to incentivise domestic manufactures to produce quality newspapers as well.

Cost of printing paper having doubled in last 2 years and increase in GST have caused a huge burden on print media houses to sustainably continue the printing of newspapers. The revenue of the newspaper has also been affected due to reduced advertisement charges and circulation due to pandemic. Many agencies are at brink of shutting down their agencies for not being able to absorb the input costs amidst decreasing revenue.

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