Post the formation of the new government, the much-awaited Union Budget has made players in the print sector look forward to their concerns being addressed.
The print media sector in India has high expectations ahead of the budget announcement. They are hoping for measures that will ease their financial burden, help publishers reduce costs and continue delivering reliable news to the public.
The President of Indian Newspaper Society, Rakesh Sharma also met the Minister of Finance Nirmala Sitharaman a few weeks ago, to highlight these concerns and concessions expected by the industry.
Removal of custom duty on newsprint
One of the major reforms the industry hopes for is removing the 5% custom duty on newsprint.
Sharma shared, “The printing industry is passing through a tough time. So for its sustenance in the long term, the duty must be very reasonable and after a certain time it should be completely withdrawn.”
Industry experts suggest the operational cost has been very high for newspapers due to the custom duty. Other factors like the Russia-Ukraine war have impacted the imports and availability of supply as well, ultimately surging the newsprint cost prices for the industry. The newsprint cost prices have risen by 7-8% crossing $600 metric tonne in the recent quarters. This number was around $400 before the pandemic, which impacted the printing and publishing sector.
Most printing presses and newsprint mills were shut down across India and abroad, negatively impacting the supply of newsprint.
Another reason mentioned by the players was the declining cost of Indian rupee has added pressure on print media industry, which is majorly dependent on imports. A regional paper like Punjab Kesari also believes that even if the newsprint prices come down, it wouldn’t make much of a difference to the paper’s profitability due to the dollar's rising cost.
Manoj Singh, Vice President of Madison Media in an earlier conversation with e4m had also shared that the cost of newsprint is not going to decrease in the coming quarters. Either it will stay the same or increase.
If the duty is removed, it would immensely help the print media industry. Publishers could better handle their costs and keep providing reliable news and information to people.
Varghese Chandy, Vice President- Marketing and Advertising Sales, Malayala Manorama shared, “The entire INS and the print industry has been asking the government to scrap the 5% import duty on newsprint. The newsprint prices are very volatile due to the geopolitical factors and other issues like the war are creating problems of availability."
He added, "Moreover, the rupee depreciation is affecting the newsprint prices. So, by removing the 5% import duty, it will be a great relief for the newspapers."
Reduction of duty on digital offset printing equipment
Sharma highlighted that the INS has also requested the government to reduce the duty on high-speed printing presses like computer-to-plate (CTP) systems. This is a technology where a reporter types a story and it directly goes to the mailroom and this method helps in improved efficiency and business costs.
This mailroom equipment and consumables which are used in the printing press are imported from countries like Japan, China, Korea, Taiwan and the government levies a duty on them, ranging from $0.13 per sqm to $0.77 per sqm, which should be reduced.
Withdrawal of GST on ads in papers
Another demand the industry has is relieving the 5% GST on advertising in newspapers. This is also applicable on commercials that can be found as booklets or fliers inside newspapers or magazines.
A Central Board of Indirect Taxes and Customs press release stated, that if the advertising agency buys space from the newspaper and sells such space for advertisement to clients on its account, then too it would be liable to pay GST of 5% on the full amount charged by the agency. Moreover, if only a service is provided, such as designing or drafting the advertisement, the same would be liable to tax of 18%.
As per Chandy, if this charge is withdrawn, it would help the advertising industry come back to print medium, which is struggling to keep up with the pre-COVID levels anyway.
Withdrawal of GST on e-paper
Not just print, an industry source, who handles the digital arm of a widely-read English daily shared, the GST on e-paper subscription is at 18% as of now, which the industry has demanded to be reduced to 5%. This will also help readers and subscribers reduce carbon footprint.
The industry also collectively asks for the withdrawal of GST on e-newspapers because if the government already charges tax on newspaper circulation, they shouldn’t be levying another tax on e-newspapers.
“E-papers are a replica of the printed newspaper and hence, imposing additional tax on the digital version of the same newspaper makes no sense,” Sharma said.
Lastly, the total income tax shall also be brought down, according to Chandy. By bringing it down, there will be more monetary movement in the market which will facilitate healthier sales, ultimately resulting in a healthier economy. This will also in turn help the advertisers to advertise more not just newspapers but on every medium.
