GST & Books: The Unfinished Chapter Tax Reform

N. Nagarajan began his publishing career in 1976 with Orient BlackSwan (formerly Orient Longman) at its Head Office in Delhi, later relocating to Hyderabad in 1982. In 1995, he established MPS Copyright Consultants and Literary Agency, before rejoining Universities Press (India) Pvt. Ltd., an associate of Orient BlackSwan, known for publishing in medicine, engineering, and technology, including Dr. A.P.J. Abdul Kalam’s Wings of Fire.Nagarajan continues to remain passionate about publishing, writes regularly to newspapers, contributes a column titled “Special Report” for Orange News (Hyderabad), and freelances as a consultant to authors.

When GST regimen came into force, for the benefit of readers books were kept away from GST but inputs to produce books like paper, cardboard, binding, printing (including royalty payable to authors) that go into producing and publishing are kept under GST. Representation from publishers association didn’t get any support or response. As a result, publishers continued to suffer and Covid induced lockdown only added more damage and small publishers even closed their shops.

Ever since the announcement of GST 2.0 Utsav by the Prime Minister, automobile and electronic showrooms have been slashing prices, citing post-GST cuts. Ironically, no such announcements are heard from bookshops. The publishers who play a vital role in promoting literacy are unable to extend similar benefits to bookshops, readers, including parents purchasing textbooks and notebooks for school-going children.

The anomaly…

Though books are exempted from GST, inputs like paper, printing materials, and royalties attract GST between 5% and 18%. Since publishers cannot claim Input Tax Credit on these, they are forced to bear the burden and cannot pass on any relief to readers. Thus, the very purpose of exempting books from GST stands defeated. Ironically when GST 2.0 was announced, the study aids, Atlas, notebooks and related items were removed from GST. Earlier when these items were under GST, publishers could claim Input Tax Credit and with removal of GST on study aides, even it has now stopped. It’s not only this, the main input paper prices gone up between 18-20 % which has led to major setback as GST hasn’t benefitted neither publishers or parents who will be forced to shell out more .

Call for action…

It’s good to see Finance Minister and Union Ministers are visiting automobile and consumer durable shops to see whether the owners are passing on benefits to customers. It would be good if education or any other Minister make a visit to book shops to check whether they are able to pass on any cuts and understand the why book prices continue be high.

I request Finance Minister to correct the anomaly by allowing paper merchants, printers, binders, transporters to exclude GST while raising invoice on book publishers with a mechanism to check fraud. Publishers have important role not only in human development but even in national development.