Impact Of Custom Duty On Imported Books In India

In pursuance of the policy of Make In India, Nirmala Sitharaman, Minister of Finance and Minister of Corporate Affairs, announced that 5 percent custom duty is being imposed on imported books with a goal to encourage domestic publishing and print industry. With the introduction of this provision, printed books including covers for printed books and printed manuals will also attract duty. There are not many takers of the claim that it is ‘aimed to benefit domestic publishing and printing.’

This move has not gone well with the publishing industry and has evoked mixed response from people in the publishing industry. It has triggered strong emotional reaction of fear, shock, anger, or worry, while there are others who believe this to be an act in right direction. With this, the industry feels that books will join the category of products like plastics and steel and other such products.

Author Shobhaa De put a poser on the move. “Why a tax on foreign books? Madam, the rest of your Budget speech was just fine. Wish you had spared books! Local gyaan is great. But foreign gyaan is also needed,” De tweeted. Spokesman of the Samajwadi Party, Ghansham Tiwari tweeted that the government is imposing custom duty on books and “No customs duty on arms! But, now an increase in customs duty on Books! A bunch of inexplicable ideas in the budget!”

This provision also goes against the spirit of Florence agreement. The Agreement on the Importation of Educational, Scientific and Cultural Materials (also known as the Florence Agreement) is a Protocol to the Agreement on the importation of educational, scientific and cultural materials of 22 November 1950.
This is also against the UNESCO treaty whereby states agree not to impose customs duties on certain educational, scientific, and cultural materials those are imported. The materials covered by the treaty include printed books, newspapers, periodicals, government publications, printed music, and works of art, antiques over 100 years old, scientific instruments used in education or research, and educational films. The Agreement does not apply to materials that contain excessive amounts of advertising material.

The government’s justification is that this is being done to encourage domestic printing industry. Infact the effect is going to be just the opposite. Reduction of other taxes on printing and publishing industry would have more positive results in this effort.

It is a matter of common knowledge that books for higher learning are imported from abroad and imposition of custom duty will shoot up the landing cost and thereby increase the selling price. This will have an adverse effect on the library budgets as the prices will escalate by a considerable amount. This will exhaust the library budgets faster and beyond the reach of individual buyers, resulting in scarcity of literature required for serious research and studies.

The higher cost of books will further weaken the leisure reading as books will become costly. This will be a great setback to government’s efforts of inculcating reading habit among the people of India. Moreover the research institutes like IITs, IIMs, and other research institutes will be badly hit as they are the ones who are the important research centers depending upon high level research imported books.

It is also argued that it is bad economics as all these institutes are funded by the government and the resultant increase in price because of import duty is to borne by the government funds. The idea, therefore, is bad logic.
Will it have any major impact of buyers? Opinions differ even among the publishing professionals. Some of them have a view that custom duty effect will be negligible. Book buyers, some believe, may not even notice the significant difference in the price.

Not all subscribe to the idea that the customs duty will make to any major impact. Dr Ashok Gupta, honorary secretary general of the Federation of Indian Publishers, is reported to have said that ‘he anticipated a negligible effect on the industry, especially on book buyers, who are unlikely to notice any significant differences in price.’
The government’s decision to levy 5% customs duty on imported books has not found many supporters among the Indian publishers. It is opined that if the government wanted to help the publishing industry, it should have eased the process of claiming GST-related benefits and make cheaper paper readily availability.

May be it is too early to sit on a judgment whether the imposition is a blessing or blight for the indigenous book industry.

“The book industry cannot afford 5% customs duty. With this in place, imports will go down. We want India to be a knowledge economy and for this, we need to have diversity in content. If prices will go up, people will stop buying imported books. FICCI has sent a letter to Government of India to look into it.”

 

 

– Ratnesh Kumar Jha, Chair, FICCI Publishing Committee and MD, South Asia, Cambridge University Press