Association of Indian Magazines (AIM) had been invited to participate in the Pre-Budget meeting for union budget 2022-23 by the Department of Revenue & Tax Research Unit, Ministry of Finance.
In the meeting, AIM representatives highlighted the debilitating impact that the pandemic has had on print media, and therefore the need for government support in lessening the tax and customs duty burden in publishing. Further, AIM representatives requested a level playing field between magazines and newspapers in various government policies, in both expenditure and revenue, as there has been a long-standing concern that magazines are not getting the same benefits as daily papers, even though both come under the definition of ‘newspapers’ under the PRB act.
The key points of the memorandum include:
Government ads in Magazines
Given that as per IRS 2019, the total reach of magazines at 8.7 crores, is about 20% of the total reach of Newspapers at 42.5 crores, DAVP should mandate that 15%–20% of the total DAVP ad spend to be spent on the magazine industry. At present, it is not even 1%. This should also apply to all budgets allocated by the all-government ministries and departments, in both central and state governments.
Input Tax Credit
It was requested that for the purpose of GST, the government allow a full Input Tax credit for both newspapers and magazines. Currently, publishers can only claim proportionate credit as circulation sale revenue is exempted, while advertising attracts 5%. Since newspapers and magazines are single products, it will be more equitable if the entire input tax is allowed for the publishing of that single product. This will also be in line with the Governments’ stated mission of minimizing tax on information and knowledge.
Customs Duty on Paper
There is 5% Customs Duty on the imported paper used by newspapers and magazines. Domestic production of Standard Newsprint (SNP) is inadequate to meet the demand and Glazed Newsprint (GNP) and Light Weight Coated Paper (LWC) are not being manufactured indigenously at all. Therefore it was requested that these duties be completely withdrawn.
GST of 12% on Light Weighted Coated (LWC) paper up to 70 gsm
At present, there is 5% GST on Standard Newsprint (SNP) and Glazed Newsprint (GNP), while 12% on Light Weight Coated paper (LWC). The magazine industry is largely using LWC while newspapers use SNP and GNP. Therefore in the interest of equity, it was requested that GST on LWC be withdrawn, or bring it at par with 5%.
Exemption of GST on the Cover Paper
Magazine covers are printed on thicker paper so that magazines can be preserved for a longer period. AIM requests GST be exempt on thicker cover paper, on an Actual User basis with RNI numbers, or at least GST is brought down to 5% on par with SNP and GNP.
Clarity of Levying GST on Digital Magazines
Newspapers, Magazines are exempted from GST under tariff item 4902. During the lockdown in Covid Pandemic when physical delivery of magazines was stopped, digital magazines were made available to readers. Therefore AIM requested that the government give clarity on this that magazines/newspapers in print as well as on digital platforms will be exempted from GST.
Tax Holiday
Given the extremely adverse circumstances, AIM has urged the Finance Ministry to consider a general tax holiday for three years
The meeting was held on December 8, 2021, under the chairmanship of Pragya Sahay Saxena, Member (L&S), CBDT, Department of Revenue, Ministry of Finance, Government of India. Paresh Nath, Delhi Press and Raj Mohan, Malayala Manorama, both former presidents of the association participated in the meeting and submitted the memorandum.
