How will we benefit from GST?

Being deemed to be the biggest tax reform ever introduced in the country till date, Goods and Services Tax (GST) is all set to roll out. The new taxation law will levy taxes on goods and services at multiple levels ranging from 0 percent to 18 percent in all industrial sectors, including printing, with lower rates for essential items and highest for luxury goods and services. As opinions pour in dividing on merits and demerits of GST, let’s find out how the new tax law will take on the graphic art industry. Common sentiment among many is to ‘wait and watch’, but there are several undoubted benefits for us from GST.

First and foremost benefit of GST for us is that the new tax reform will bring a single-point taxation system throughout the country, making taxation simple, transparent and efficient. When we look at the current signage/wide-format printing segment, in particular, and the whole printing industry, in general, there is a big issue of blocked working capital due to large amount of accumulated Cenvat (Central Value Added Tax) credit balances. This issue common in the current indirect tax regime of the country will substantially be over by eliminating the cascading taxes and duties after GST implementation.

Printer and printing material suppliers and their allies, who pay hefty tax on inter-state transport of products, will be the ones getting full relief as GST has to axe all indirect taxes imposed on them. This new tax law will eliminate a string of cost efficiencies arising due to present levy of several taxes, like Central Sales Tax (CST), octroi or local body taxes as well as other interstate tax barriers. For sure, GST will reduce costs associated with tax compliances, inventories and logistics for every one of us, either a machine manufacturer or a dealer. And in turn, this will bring improvement in cost competitiveness by unifying the fragmented domestic market.

Well, we are very much an import-based industry. On this front, GST will consider imports of machines or materials as supplies in the course of inter-state trade, and accordingly IGST (Integrated GST) tax shall be levied, in addition to the existing Basic Custom Duty (BCD). IGST, which is one of the four GST Bills, is designed for levying and collecting tax on supply of products between different states by the centre. And signage sector is said to be taxable at 12.5 percent under the Schedule V of GST. Experts say the new tax law may bring temporary slowdown at the beginning, but there will be sustainable gain and growth in the long run. After all, in overall principle, GST will have a positive impact on the signage industry.

In this issue, we have a handful of picturesque features on landmark signage projects executed by some of the country’s eminent sign making firms, who are known for their unconventional jobs. And Aligarh is our chosen region under the ‘Region Exclusive’ column this issue. When our travelling team interacts with some of the key sign making firms in this western UP city, it has been found that every one of them is passionate about new and innovative ways of sign-making with fresh methodologies and technologies.

More or less, the industry is escalating. Inventive signage works are common sights to see. Let’s be part of this change, together!