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The All India Notebook Manufacturers Association (AINMA) has sought the imposition of a minimum import price (MIP) on finished notebooks to check zero-duty imports from ASEAN countries, while calling for an anti-dumping investigation into imports from Indonesia.
The association has also sought changes to the Central Goods and Services Tax (CGST) Rules to allow exporters of domestically exempt goods to voluntarily pay Integrated Goods and Services Tax (IGST) on export supplies. It said this would enable them to access the automated Indian Customs Electronic Gateway (ICEGATE) refund system and ease working capital constraints.
AINMA has further called for an inquiry into the pricing practices of domestic paper mills to ensure that the benefits of tax rationalisation are passed on to the education sector.
In a representation to the Ministry of Commerce and Industry, the association said the domestic notebook and exercise book manufacturing sector was facing a combination of zero-duty imports from ASEAN countries and structural issues arising from the GST framework.
Finished notebooks from countries such as Indonesia enter India at zero Basic Customs Duty under the ASEAN Free Trade Agreement and attract zero IGST, according to the association.
Domestic manufacturers, on the other hand, face higher costs for raw materials and other inputs, AINMA said. The association said that while the GST Council’s decision to reduce the GST rate on exercise books and notebooks to nil was aimed at making educational supplies more affordable, domestic manufacturers could not claim input tax credit (ITC) against exempt final products.
“…Indian MSME manufacturers are trapped in a cascading tax impact and inverted duty structure. Essential raw materials and auxiliary consumables, such as coated paperboard and packaging, continue to attract 18 per cent GST or 0 per cent with enhanced basic purchase cost to the tune of 12-14 per cent because no Input Tax Credit (ITC) can be claimed against an exempt final product by the paper mills. This massive cost disadvantage allows foreign suppliers to effortlessly undercut local producers, threatening the survival of an industry that currently possesses the capacity to meet all domestic demand,” said AINMA.
The increase has added to the costs of notebook manufacturers and prevented the benefit of the lower GST rate from reaching students, it said.
The association said the domestic industry has the capacity to meet the country’s demand for notebooks and exercise books but faces a cost disadvantage compared with imported products.
Seeking government intervention, AINMA has asked the Ministry of Commerce and Industry, the Directorate General of Trade Remedies (DGTR) and the GST Council to address the issues. It said an MIP on finished notebooks could help check imports from ASEAN countries, while an anti-dumping investigation could examine alleged dumping of notebooks from Indonesia.
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