Union Budget 2012-13: Impact on the printing industry
K.S Venkataraman, the chairman for finance and taxation committee at All India Federation of Master Printers (AIFMP) gives a lowdown on the impact of the union budget on the print industry.
29 Mar 2012 | By PrintWeek India
K S Venkataraman, AIFMP
INDIRECT TAX PROPOSALS
1. Central Excise Duty
1.1 Of direct concern to the printing industry are the goods falling under Chapters 47, 48 and 49 which cover paper and paperboard as well as goods manufactured out of such paper/ paperboard.
1.2 Significant changes were made in the last year’s (2011-12) budget bringing into the excise fold, some of the products of the printing industry in chapters 48 and 49 which were hitherto exempted from duty, apart from enhancing the rate of duty on other items.
To facilitate easy reference at a glance, the items in chapters 47,48 and 49 relevant to the printing and packaging industry and the excise duty liability thereon, are listed below:-
| S.No | Tariff Heading | Description | Rate of Duty |
| (a) | 4707 90 00 | Waste and scrap | 6% (up from 5%) |
| (b) | 4817 | Envelopes, lettercards, plain post cards etc | 2% (without CENVAT credit) (up from 1 %) |
| (c) | 4819 10 10 | Corrugated cartons / boxes (whether or not pasted with duplex sheet on outer surface) | 6% (up from 5%) |
| 4819 10 90 | Other (eg: partitions / dividers) | 6% (up from 5%) | |
| 4808 10 00 | Corrugated sheets | 6% (up from 5%) | |
| (d) | 4819 20 20 | Cartons / boxes (non-corrugated) | 12% (up from 10%) |
| 4819 20 90 | Other | 12% (up from 10%) | |
| (e) | 4819 50 10 | Other packing containers (e.g pouches, record sleeves etc) made from corrugated paper / board | 12% (up from 10%) |
| 4819 50 90 | Other packing containers (e.g pouches, record sleeves etc) made from non-corrugated paper / board | 12% (up from 10%) | |
| (f) | 4820 10 | Registers, accounts books, receipt books, letter pads, diaries, memorandum pads etc | 12% (up from 10%) |
| 4820 20 00 | Exercise books, note books | 2% (without CENVAT credit) (Or 6% with CENVAT credit) | |
| (g) | 4821 | Labels, tags etc | 12% (up from 10%) |
| (h) | 4901 | Printed books, brochures, leaflets, pamphlets | NIL (No change) |
| 4902 | Newspapers, journals, periodicals etc | NIL (No change) | |
| 4903 | Children’s picture, drawing, colour books, etc | NIL (No change) | |
| 4905 | Maps, atlases etc | NIL (No change) | |
| 4909 | Printed or illustrated postcards, printed cards, bearing personal greetings, messages or announce- ments, wedding cards etc | 2% (without CENVAT credit) (up from 1%) | |
| 4910 | Calendars of any kind printed, calendar blocks | 2% (without CENVAT credit) (up from 1%) | |
| 4911 | Other printed matter - trade advertising material, commercial catalogues,posters, inlay cards etc | NIL (No change) |
1.3 The present budget for 2012-13, while it does not make any additions to the goods which are subject to duty, the tariff rates have been raised upward on all items – from 10 % to 12 %, 5% to 6%, 1% to 2% with effect from 16 March, 2012.
1.4 To avoid classification disputes, a note has been inserted in chapter 48 to provide that “notwithstanding anything contained in note 12, if the paper and paper products of heading 4811, 4816, or 4820 are printed with any character, name, logo, motif or format they shall remain classified under chapter 48 as long as such products are intended to be used for further printing.
1.5 No other changes have been made in the 2011-12 budget and hence are viable for the current financial year too.
2. CUSTOMS DUTY
No change has been made in the customs duty rate structure for the import of printing machinery and equipment, spare parts and components and for the import of paper/ paperboard.
3. SERVICE TAX
3.1 What is significant to note in the levy of service tax is the paradigm shift by change over to a Negative List of services which will be outside the incidence of the levy. Hitherto, the levy was at 10% on some 117 services listed in the Finance Act. The Negative List covers 17 services which will come into effect from a date to be notified. All other services not in the Negative List will attract service tax.
3.2 However, by notification number 12/2012 – service tax dated 17 March, 2012 certain exemptions from service tax already prevailing are continued. (Covered in 34 entries therein).
3.3 A doubt arose whether the labour component of Printing Works Contracts will attract service tax now. This doubt stands cleared, since entry number 30. (a) in the aforesaid notification 12/2012 – ST specifically exempts “printing job works” from service tax (apart from “agriculture” and “textile processing” job works.)
3.4 The rate of service tax has been raised to 12% (from the present 10%) plus education cesses at 3 % (aggregating to 12.36 %) effective 1 April, 2012.
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