With the GST council expected to meet this month for its quarterly meeting, several paper and printing bodies have made representations to roll back the rate hike effected in the previous council meeting.
The GST rate on cartons, boxes, bags, packing containers of paper, etc., was hiked from 12 per cent to 18 per cent in the 45th council meeting held on September 17.
“We have invited Karnataka’s Chief Minister Basavaraj Bommai to make him aware that this rate hike is unfortunate. The GST council is haphazardly and without any rationale tampering and pushing the rates northward” said I S Prasad, President, Federation of Karnataka Chambers of Commerce and Industry (FKCCI).
Paper packaging industry players say that the six per cent cost-push will have a detrimental impact on their working capital and would also force businesses to go back to wooden packaging instead of corrugated boxes.
“Businesses can’t afford this increase and it will induce them to buy products without paying GST. We have represented to the council to revisit the issue and highlighted the negative impact it will have on the industry”, said Harish Madan, Secretary, Indian Corrugated Case Manufacturers Association.
Rates for miscellaneous paper goods like cards, catalogues and printed material have also been raised from 12 per cent to 18 per cent. “At a time when the printing industry is facing an existential crisis, this is not at all expected of the government,” said S Sampathraman, former president, FKCCI.
C R Janardhana, chairman of Printech Park Cluster and former President of Karnataka State Printers Association, said that he has had healthy discussions with CM Basavaraj Bommai, also a GST Council member, and is confident that the CM will get the rate hike reversed.
“We are already operating at a wafer-thin margin and this revision will not be sustainable for the industry”, Janardhana added.
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