How GST is changing the ad printing business during Durga Puja

The goods and services tax (GST) is threatening to change the face of West Bengal’s biggest festival, Durga Puja, from next year. For the numerous small-scale printers involved in the advertising space, but under the ambit of GST, the next pujas will just mean less work and less cheer.

After the implementation of GST, companies have become more conscious about the input tax credit that can be claimed in full as compared to the partial tax claim under the Value Added Tax (VAT) regime. Previously, advertisers were able to claim service tax credit for advertisements in print media, outdoor billboards, television and other forms of electronic media. However, now the entire 18 per cent tax can be claimed back by the advertisers.

“This has been replicated even in case of advertisements during the Puja season. Sponsors are now keen to get the work done by DTP (desktop publishing) companies for the billboards and other advertising agencies who fall under the GST ambit,” said Surojit Sadhukhan, owner of Om Enterprises.

Sadhukhan is one of the numerous DTP and flex printing makers who have been left outside the GST ambit as his annual turnover is less than Rs 20 lakh. As a result, although he lost around 10 per cent of the Puja season’s business this year, he expects the next Durga Puja to wreak havoc on his business.

A similar concern is shared by Ramakanta Mondal of Progress Enterprises who gets around 20 per cent of his annual revenue by designing advertising artwork and printing banners & flex during the Puja season. Most of this order comes in from the Puja organisers of Ajeya Sanghati Club, one of the popular pujas in South Kolkata.

An organiser from the Singhi Park Durga Puja Committee said: “The unorganised sector, ranging from the idol makers to decorators to print companies, takes up the majority of the Puja budget. However, I feel that gradually, next year onwards, sponsors will aggressively seek input tax credit and thus the organised sector, coming within the GST fold will play the biggest role in the Puja season.” Singhi Park Durga Puja is a medium-budget puja in South Kolkata.

Another organiser from the Barisha Club Durga Puja Committee, which has won numerous accolades in the past, opined that next year onwards companies would prefer to sponsor those Puja committees that can attract crowds in the first place, and secondly, can ensure better GST-complaint invoices for the various sponsorships.

Srijan Chakraborty, owner of Perfect Offset Printers, which has a GST registration number and enjoys patronage from clients such as Tata Motors, Star Cement, Fortune Group and others, sees it as a positive trend, as eventually, in the long term it will help his business grow.

Amritanshu Khaitan, managing director at Eveready Industries, who started his maiden Puja advertising campaign for the lights and small appliances range this year, explained that input tax credit claim is “very important and crucial when placing the orders with the advertising and printing companies” and Durga Puja sponsorship is no exception.

This year during the Durga Puja, Eveready is running a television ad campaign and has come up with a contest for housing societies and associations for the best puja.

A recent report from Pitch Madison Advertising stated that the advertising market in the country is poised to grow 13.5 per cent this year to touch Rs 56,152 crore from the earlier year’s market size of Rs 49,480 crore. Industry officials estimate that Kolkata contributes around 5-8 per cent of the national market and the Puja season alone accounts for 20-25 per cent of the annual advertising revenue.

With no available data to segregate this advertising market into organised and unorganised sectors, the general perception is that 40 per cent of the market falls under the organised category.

Most of these printing companies that do not possess a GST registration have other lines of business such as photocopiers, photography and designing studios and related businesses. Many opined that next year onwards, if they lose the printing business during the Puja season, they will have to fall back on these other lines of business.

Nevertheless, next year onwards, Pujas are going to become “more organised”.