What publishers/ distributors want?

Kailash Balani, Managing Director, Balani Group and Past President, FPBAI and member of the FICCI publishing committee, shares his views on GST on e-journals and the state of funds given to libraries for buying books.


Universities exempt from paying GST on purchase of e-journals – A rising burden on distributors

The educational institutions awarding degrees are exempt from paying GST on purchase of e-journals, whereas the e-journal as a product is not exempt and hence the supplier is supposed to pay GST, which cannot be recovered. This is not a sustainable business model for the distributor.

Distributor woes: On an average, the commission that a distributor earns is around 2-8% but is required to pay GST @ 18% on sale of e-journals to an educational institution. If a distributor pays this GST from his pocket, he will definitely become bankrupt and even otherwise as the government would not spare the supplier if proper GST is not paid.

The supplier cannot include GST in sale price to customer as institutions pay as per publisher’s price proof/quote and cannot mark up to recover GST.Moreover, libraries do not have extra library budget to pay 18% more on their purchases.However, libraries are not exempt from paying GST on other purchases then why on e-journals?

So, the question arises why exempt educational institutions from paying GST on purchase of e-journals and penalise a supplier?

GST troubles: GST rules are not conducive to doing business. It has added costs in terms of filing returns, paperwork , the cost of additional human resource and at the end litigation. GST mechanism is so complicated and is hardly understood by business at large. Even GST council is struggling to fine tune its mechanism so that all are benefitted by the GST regime. By the time its fine tuned, there would be many litigations and then perhaps one more dispute resolution scheme will be offered by the government to clean GST litigations!

GST council should seriously look into this issue. Educational institutions should not be exempted from paying GST or the distributor should also be exempted to pay GST on the purchase. GST is welcome but its mechanism should be inviting!!

Institutions not in hurry to utilise funds: a cause of worry!

Most of the educational and research institutes complain that they don’t get enough library book/e-resource budget for purchases and whereas there are some institutes who sit on funds for months and years on some pretext or the other.

In November 2018, one of universities in Eastern India got huge funds for purchase of ebooks and archives. They called for quotes on most urgent basis. Publishers and distributors rushed their quotes within 5-6 days as the university said they would decide purchase immediately.After a long wait of one year, the distributors and publishers who had submitted their quotes were called for final negotiation. But still there is no sign of orders.

Are they not concerned about providing resources to students and the researchers specially when they have received special funds to improve their national ranking?It is the tax payers money sitting idle and on the other hand researchers are suffering for want of good content.The more they delay in making a purchase, the more they might pay.

In another case in Delhi, a medical consortia called for submission of quote for e-journals via tender in August 2019. Publishers and vendors have submitted quotes with huge security deposits without earning any interest and the decision to purchase is yet to be made even after six months of the opening of the tender. When publishers visit them to find the reason for delay, there is only answer – “We shall get back to you!” Again the students and the researchers are suffering for want of good content.

Funding agencies must penalise such institutions who sit on funds and are not able to decide on purchases within a reasonable time. There should be some accountability after all.

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