One Nation One Tax One Market is good for print

These are responses to some of the comments I have heard about GST.

Comment No 1

It will result in a price increase for the small scale printer-manufacturers who do not need to register under excise and service tax department. They need to charge only VAT or WCT as of now.

I am not sure who needed to register earlier as a print provider under excise, except a few cases like those converting paper to supply them as folded cartons, corrugated boxes, diaries, etc. In the current regime, they stand to benefit as GST is applicable to all their buyers and can completely setoff these taxes. Earlier, a small FMCG or food manufacturer could ask them to supply material without any excise duty, as they did do not claim the set off. Today, every link in the chain can avail the set-off against the tax liability. And so, the tax is a cost only in value addition, which gets absorbed in the next process of value addition. Therefore, a buyer of the printer’s services will not treat the GST as a cost at all. It is similar to what we have been doing with excise duty in manufacturing.

So you can simply ignore the GST that is on your purchase bill – be it ink, adhesive, paper or machine. A print firm must not factor these while calculating the final costs.

Earlier, one could not avail the set-off on central excise and central sales tax on machines and consumables, but now you can. GST will do away with Draconian entry taxes like octroi. 

Comment No 2

Books have their own destiny: Some books are exempt and others are under GST

Books are classified as reading and writing books in our own trade parlance. The reading books have zero tax even in the pre-GST era while the exercise note books and diaries are taxed. There were lot of confusions and riders earlier for notebooks, including SSI exemptions, 1% non-convertible duty and so on in the past.

There is much-more clarity now. This is because the exercise notebooks and diaries have consumables that have GST they need not worry about cost escalations. There was a notification of reversal of the inclusion of colouring books under the GST-able category and now these have been exempt.

(Printed books, including Braille books [4901] and newspaper, periodicals and journals [4902], maps, atlas, chart and globe [4905] – Zero GST and 4820 registers, account books, note books, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting-pads, binders (loose-leaf or other), folders, file covers, etc, at 18%.)

On publishing

As the books, be it trade or education, publishing is not taxed under GST. And so, they will not be able to set off the GST charged by their printer convertors. This may result in a cost increase for the publishers, which they may have to pass on to the trade.

At the risk of being ‘scolded’, I have a contrarian view that books should be taxed, as the consumer will have to pay more for the increase in costs. It would also have brought in some badly needed value addition to this industry. Here, the government is probably saying we do not tax “noble products and revered services”, but I am not sure if makers or consumers of these products are benefitted in anyway by making their products zero tax.

These are my private thoughts. I have penned them at the insistence of Ramu Ramanathan (the editor of PrintWeek India). I was to undertake this venture only after consuming a lot of high GST products (like Old Monk rum) but had to abandon that, as my supplier is out of stocks. So if you have any objections to my thoughts these should be taken up with the finance minister, tax consultants, and of course, the editor of this magazine.

(P Sajith is the director of Impel Services, a Welbound group company.)