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Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
Book lovers and students will now have to pay more as books will become costlier by 10-20 per cent under the Goods and Services Tax regime.
Though books continue to remain exempt under GST, but inputs such as printing, binding and royalties to authors now attract tax at 12 per cent. Since the publishers don’t get input tax credit, they now propose to pass it on to customers.
“Books are not taxable under GST, but we are at a disadvantage as we lose out on input tax credit. Prices of books will increase by 15 per cent to 20 per cent,” said Amit Bhargava, Director of Taxmann.
The company publishes legal books on topics such as direct and indirect tax laws, banking and company laws that are also used by University students. Starting July 1, it has already hiked prices of books to reflect the changes with GST.
But on the ground, it is unlikely that prices of your favourite bestseller would have increased immediately, although retailers expect a hike in the coming months.
Nabhi Kumar Jain, owner of Jain Book Depot, the iconic landmark located in Connaught Place, believes consumers are bound to see the impact of GST on books in the next one or two months. Jain who also run Nabhi Publications, said, “We have not changed the MRP of books currently but we believe books will see an upward revision in prices in the next 1-2 months.”
Publishers of school textbooks are also planning to hike prices, but it is expected from the next academic session.
Subash Goel, Treasurer, Federation of Educational Publishers in India, said, “We believe that MRP of books could go up by 12-15 per cent as costs of publishers have gone up under the GST regime.” He added the 12 per cent GST being imposed on author royalties will be through reverse charges so publishers will not be able to avail themselves of any input tax credit on this cost.
The GST on royalties is being seen as the biggest challenge by the industry, which will neither help the publisher, the reader or the author.
“When the government is trying to give a thrust to education, this is not favourable development,” said Ashok Gupta, a Chartered Accountant, associated with a publishing house.
GST on paperFurther, paper also attracts GST. For transition stocks from before July 1, publishers and printers will not get any input tax credit on excise duty and central sales tax paid by them.
“There is no set-off for transition stocks and it will add to costs,” said another publisher who did not wish to be identified.
As a special concession for young children, the GST Council had decided to lower the rate on exercise books to 12 per cent from the earlier proposal of 18 per cent and had altogether exempted colouring books used by small children from the tax.
Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
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