The Offset Printers Association (OPA), which represents India's printing and packaging sector, has raised strong objections to the government's proposed GST hike on paper and paperboard from 12% to 18%, set to take effect on September 22, 2025.
OPA leaders warned that the move would significantly raise the cost of textbooks and educational materials, burdening millions of households and jeopardizing India's goal of "Education for All."
Social Impact: Rising Costs for Students and Families
OPA General Secretary stressed that paper is not just a commodity but the "soul of education, knowledge and culture." Nearly 70% of India's 2.5 lakh printing units produce textbooks and learning materials.
With the higher tax, textbook prices could rise by 10-15%, directly affecting more than 200 million students nationwide.
"At a time when families are already struggling with inflation and rising education costs, this GST hike risks widening the gap between privileged and underprivileged children, undermining literacy and social equity," he said.
Inverted Duty Structure Hurts Industry
OPA President added that the tax hike creates an inverted duty structure. While the GST Council recently reduced tax on cartons, boxes and cases of paperboard from 12% to 5%, imposing 18% on raw paper creates a 13% mismatch.
Printing and packaging power sectors like education, FMCG, pharmaceuticals, retail and exports. With packaging making up 65% of India's Rs 80,000 crore paper market, the imbalance could trap working capital, erode competitiveness, and push 30% of micro and small printing units toward closure within a year.
The sector supports 2.5 million jobs and contributes over Rs 1.2 lakh crore to GDP.
Declining Paper Demand and Compliance Issues
Paper consumption has already been shrinking by 5.6% annually since 2020. Industry experts project a further 8-10% decline if the GST hike is implemented.
Adding to the confusion, while exercise books, graph books and lab notebooks attract zero GST, the same grade of paper used for textbooks and stationery faces an 18% tax, creating classification disputes for 60% of traders.
OPA's Appeal to the Finance Ministry
OPA has urged Finance Minister Nirmala Sitharaman to reconsider the decision and:
- Reduce GST on paper and paperboard to 5%, matching the rate on cartons and boxes.
- Create a uniform GST rate across all paper products to eliminate disputes.
- Ensure education remains affordable by keeping input costs low.
The association warned that without urgent intervention, the hike could disrupt the printing and education ecosystem, undermine literacy efforts, and cause widespread business closures.
CAclubindia
