The GST woes…
The book industry was very happy to note that there was no GST on all its products. But this however, does not translate into entirely good news for booksellers or for the book buyers, as industry tries to sort out on how to adjust to the tax reforms, points out Nitin Shah. Books are the end product, but all that goes into making of a book is taxed under GST. Components like paper, ink, gum, printing and services like the data entry and cover designing will all carry a tax ranging between 12% and 18%. The most inappropriate tax that the Government has applied is on authors’ royalties which will be 18%. Now with all the input tax that the industry bears, it will have to further bear a tax of 18% on the royalties, that it will have to pay vide reverse charge mechanism (RCM). There is no credit whatsoever on all these taxes (GST), as the final product i.e., books carries no GST. In the end this will necessarily mean hiking up the selling rates of the books anywhere between 30 to 40%.
GST will benefit the whole nation in the long run, except the publishers. Will the reader be benefited under such a situation?
The books that were being currently sold at Rs 100 will have to be priced anywhere between Rs.130 to Rs.140. Can a middle class reader or for that matter any booklover accept this deep price high in pursuit of reading in our country?
Nitin ShahApart from the cost of production the operation cost of GST management in the work flow of a publishing house is also set to increase. There will be 36 annual filings in addition to annual Income Tax submission every year. The industry will have to appoint dedicated people to manage all these, which will all lead to more expenses and indirectly result in hiking up the price of the book by further 10%.
All such policies may not definitely help the Indian language publishers who are keeping creativity active by publishing smaller print run of books constantly. This will deeply affect the financial viability of local publishing companies as all of us work on very slim margins.
As the government has always exempted publishers and books from GST in keeping with the national policy to increase knowledge and literacy and education, the proposed new GST on author royalties would be reversing their very necessary support to publishers to keep spreading literacy and knowledge.
Books and authors cannot be clubbed with the entertainment industry, as films and music are sources of entertainment, whereas books are primarily about knowledge and literacy. This is why they have always been exempted from GST, and this is why we humbly request that GST not to be imposed on author royalties as well as all that inputs that goes into making of a book.
The author is the vice president (South) of The Federation of Publishers’ & Booksellers Association in India, New Delhi and the Managing Director of Sapna Book House Pvt Ltd, Bangalore.