Association of magazines appeals to Finance Minister

The Association of Indian Magazines (AIM) has written a letter to the Finance Minister to “Request for urgent relief to magazine publishers and save the sector from extinction”.

Below is the text of the letter...

At the outset, we would like to thank you for reducing the customs duty on newsprint, from 10% to 5%, which had provided some relief to the magazine publishers.

As you are aware, magazines play a very important role in the society, by serving millions of readers by providing insights, analysis, chronicling trends and marketing of goods and services. Magazines are not just content but experiences. Taking into account this role played by the magazines in dissemination of knowledge, our Constitution has provided many concessions to magazines and are always treated on par with newspapers.

The magazine industry has been going through hard times. The advertising revenues have declined as advertisers face the pressure to reduce marketing spends, due to the prevailing macro-economic conditions. Coupled with this, is the rising input costs, resulting in low or no profitability for magazine publishers.

COVID-19 and lockdown have now cast its shadow on magazine publishing and has thrown our business completely out of gear. Though classified as 'essential services’, distribution of magazines has been severely hampered during lockdown. Most magazines are printed in one city and transported to others states through the Railways network and it is the postal and local courier services that we rely on for delivery of subscription copies. Both are currently not happening. Due to the economic impact of COVID-19, businesses have deferred their advertising spends, depriving magazines of their major revenues. This has forced magazine publishers, across country, to take drastic steps like slashing the number of pages and skipping issues. However, given the severity of the problem, these measures will not suffice and survival of magazines will be difficult unless Government steps in with a bail-out package.

At this backdrop, kindly consider the following requests to salvage the magazine publishing sector:

• Remove the remaining 5% customs duty on newsprint. (Before the Union Budget 2019-20, there was no customs duty on newsprint.)

• Withdraw the GST on newsprint or at least make the GST on LWC (paper used by magazines) on par with SNP/ GNP (used by newspapers) at 5%. As per PRB Act, both newspapers and magazines come under the definition of ‘Newspapers’. (Prior to the introduction of GST, LWC upto 70 gsm had no duties or taxes, whatsoever, for end users.)

• Tax holiday for two years.

• Allocate 10% of the BOC (DAVP) budgets to magazines.

• Soft loans for two years at 5% interest, with a moratorium for 6 months.

• Bring down the GST on Digital Content Writing to 5% from the existing 18%. (Content writing is our core business and to supplement income, magazine publishers have entered into Digital Content Writing).

• Reduce GST on Events, conducted by magazine publishers, to 5%. (Our Events are extension of our Content and we have created them to engage with our readers further.)

The letter is signed by R Rajmohan, President of AIM.