Advanced technology rules the roost today. Like many other industries, the Indian print industry also needs to modernise itself with machines of latest technology comprising automation and high-speed. These machineries are available only on import because of non-availability of same at the home-front, against payment of 25 percent import duty (Customs Duty).

To achieve the ultimate goal of the industry becoming a highly developed one, imports of upgraded machineries must be made cheap. The present rate of duty, i.e. 25% must be brought down to the barest minimum of 5-10%, so that more people would come forward to import latest machines to modernise their units. Larger imports will set-off the loss, if any, that the government may lose by reducing the duty rate.

In many Asian and European countries the import duty is not beyond 3%.

Import against full payment of duty

Then there is the duty against lesser rate of duty under the export guarantee scheme (EGS), which is to export for a value 10 times of the duty saved (not paid) under the scheme. The export guarantee quantum is too harsh now and sometimes it lands the importer-exporter in trouble. Fluctuating market conditions determine the value of exportable products which many a time plays truant. Due to this, the exporter is deemed a defaulter and it is prone to mar his export business too. This hardship must be alleviated and the export guarantee quantum be fixed as low as possible.

At present, if a whole machine is imported, the duty is only 25%; whereas, a part or a component for the same machine if imported separately it attracts higher duty of 85-100%. It should be levied at the same rate as levied for the whole machine. If the importer does not have the machine where is the need for these spares or components? Logic must prevail.

No industry can sustain and survive without required finance being available at an affordable rate of interest. Today, SSI units in India can’t get bank loans at interest rates less than 12%. Some banks even charge up to 14%. The irony is that these higher rates of interest are taken even after giving collateral securities. This kills the very entrepreneurship of people and drives them to shrink within their shells.

In countries like Japan, South Korea, Taiwan, Germany, etc, the lending rates are a mere 2-3% maximum. This is the international pattern. SSIs are contributing a lion’s share to government’s exchequer. But for its development, institutional finance is becoming scarce. The government must direct the banks to be print industry-friendly.

Excise duty: print has a dual status

In the excise manual, chapters 48 and 49 are of importance to the printing industry. Items falling under chapter 49 like cartons, carton boxes, calendars, labels, lamination etc are all levied at 12.5 percent. Items falling under 48: books for reading (novels, fictions, epics, classics, etc), exercise notebooks, stationery items like covers, folders, flyers etc are charged at 4 percent, whereas books meant for reading are exempt from duty. It is strange the printing industry enjoys a dual status, i.e. manufacturer as far as chapter 49 is concerned and service provider under chapter 48. The process is one and the same but, the substrates may vary.

This variance obviously makes the distinction. It is not standing to any logic or reasoning. The excise duty on printed items should be withdrawn because a printer pays tax on every item of raw material outsourced from different ends. The demand for payment of excise duty cripples the industry and hampers the growth.

Engineering goods exported under the aegis of EEPC are encouraged, awarded and rewarded annually. Similarly printing exports should also be encouraged by giving some attractive incentives so that more and more printers will take to exports. Hope the government will consider this.

Import of PS plates

In India only a very few manufacturers are supplying PS plates which are essential for printing. Only one major manufacturer is catering to about 50% of the industry’s demand. Other players are small entities and their products seldom meet the standards. In such a situation printers are forced tide over the deficit in supply by turning to import of these plates from South Korea or China. But these imports have run into trouble in the wake of imposition of anti-dumping duty. This is not level playing. The government must take a realistic view by taking stock of the ground situation.

G Nagsundar of Geetanjali Graphics is also president at the Karnataka Offset Printer's Association and vice-president South All India Federation of Master Printers