Paper sector seeks tax relief

The Rs 17,000 crore domestic paper industry, that contributes about Rs 2,500 crore to the exchequer, is seeking tax relief from the government.

"The paper imports attract a duty of about 60 per cent, which is a sum of 40 per cent import duty and excise duty ranging from 0 to 16 per cent depending upon the product and volume. There should be a uniform rate of 8 per cent on this," said R Narayan Moorthy, Secretary General, Indian Paper Manufacturers Association (IPMA).

"If the government charges heavy tax on paper, the producers have to pass the burden to consumers. Due to which the students, newpaper and magazine readers suffer lot," said Rajeev R Vederah, president, Indian Paper Manufacturers Association.

The industry argues that the government by bringing about some policy changes may even help hindering migration from rural areas to urban areas as paper industry by and large exists in the rural areas.

"If the government promotes paper industry, a large chunk of rural youth would prefer not to migrate to urban areas as they would get earning opportunities in their own locality," said Pradeep Dhobale, vice president, IPMA and chief executive, ITC, Paperboards & Speciality Papers Division.

Generally, paper industry grows in tune with country's gross domestic product (GDP). As GDP is expected to grow by 6.5 per cent this year, the industry expects a growth rate of little ahead of 7 per cent this year.

Segmentwise, newsprint is expected to grow 4 per cent while, healthy demand from industry would lift paper board growth rate by 9 per cent. But, cultural paper industry is estimated to grow by 7 per cent this year.

On environmental issues Moorthy said the industry consumed only one per cent tree cut while the rest 99 per cent is used for fuel in rural areas. He demanded some piece of land be given to the industry where trees could be grown exclusively for the sector.

This, he said, would also provide employment to about three lakh youths.