Converting GST into a two-tier structure is a welcome move. However, for paper and paperboard products, a uniform 5 per cent GST under Chapter 48 is essential. At present, as per the statements issued by the Finance Ministry, paper used for exercise books, notebooks, and maps is on NIL GST slab while paper used for printing calendars, diaries, posters, and stationery is taxed at 18 per cent, said outgoing president of Federation of Paper Traders Associations of India.
Since paper can be used for any of the above purposes, the reversal of input tax credit for nil-rated goods is a cause of concern, he said at the association’s 64th AGM in Chennai on Friday.
The 18 per cent GST on paper and 5 per cent GST on many finished paper products can create an inverted duty structure that puts pressure on MSMEs. Rationalising paper and paperboard to a uniform 5 per cent GST will simplify the entire value chain — from manufacturing to notebooks, packaging, and printing — making it more efficient, growth-oriented, and aligned under the same tax slab, he said. The paper trade and paper products industry is one of India’s key sectors, directly employing over half a million people and indirectly supporting nearly two million livelihoods, he added.
The president-elect, FTPA, said the association would conduct campaigns to clear myths around the sustainability of the paper industry, noting that the sector does not cut forests indiscriminately but is one of the largest recyclers and pioneers in sustainable practices.
He said nearly 75 per cent of paper in India is produced from waste paper recycling, about 20 per cent from wood and bamboo (most of which sourced through farmer-grown plantations and social forestry initiatives by paper mills), and the rest 6 per cent to 8 per cent from agricultural residues such as wheat straw, paddy straw, and sugarcane bagasse.
