The All India Notebook Manufacturers Association expresses its deep gratitude to the Prime Minister and the Government of India for the bold steps taken under the GST 2.0 reforms, aimed at simplifying taxation and supporting economic growth.
However, the situation that has arisen with imposing of 0% GST on notebooks with 0% custom duty as per Asean Free Trade Agreement, will play havoc with Indian Notebook manufacturers & industry.
Under the ASEAN Free Trade Agreement, imports from countries like Indonesia, Thailand, and Malaysia come in at zero customs duty.
Now, with 0% GST, there is 0% IGST on imports, (which means that there will be no countervailing duty also on imported notebooks), making them totally duty free, cheaper than Indian products, despite India having sufficient capacity to meet domestic demand.
The recent decision to reduce the GST rate on paper used for notebooks to 0% was intended to ease costs in the education sector. Yet, in practice, this measure has unintended consequences.
Paperboard and other raw materials required for notebook manufacturing in India including packaging materials, gum, wires, packaging films etc attract 18% GST, which is being passed on to Indian notebook manufactures, who has no avenues to obtain input tax credit in order to make their products competitive against imports. Also, all paper boards consumed in the notebook industry are coated and the GST rate for the same has gone up from 12% to 18%, again increasing the cost for indigenous manufacturers.
Notebook manufacturing in India is primarily a small-scale, labour-intensive industry that sustains lakhs of workers in rural and semi-urban areas. The 0% GST is not conducive of “Made in India” initiative of our Prime Minister and his dream for promoting & using Swadeshi Products.
The surge of cheaper imports from Indonesia, world’s largest paper and paper products manufacturer, will wipe out local industries, causing massive unemployment and shutting down existing investments, detrimental to the Indian trade, foreign exchange and the country.
Hence, the Association wishes to draw urgent attention of Govt. of India to save domestic notebook making industry and its dire consequences.