Tax on paper to hit products, environment

NEW DELHI: In an age dominated byelectronic expressions of thoughts and ideas (read emails and websites), thecraft of writing on a piece of paper or a greeting card gets a further beatingby a new proposal. The sales tax on paper in the 2004-05 budget for the city hasbeen hiked from 4 per cent to 8 per cent.It will have both directand indirect impact. First, it will see a steep hike in all paper products thatwe can comprehend — books, note pads, packets, printing paper, stick padsand cartons. Then there will be a spiralling effect which will have bearings onsociety and environment. "Paper is a major input in the publishing industry andthe hike will effect rise in price of books, notebooks and other paper products," says Kalpana Rajaram, a publisher. In a society, which is miserly when itcomes to reading habits, this will mean people will have one more excuse not tobuy books.The sales tax, according to finance minister K K Walia,has been hiked to "correct the infringement in Uniform Floor Rate (UFR) as perthe advice of the Empowered Committee of the state finance ministers. This is inline with the uniform rates adopted by the other states."Papermerchants feel discriminated against with this hike. Yoginder Goel, ex-presidentPaper Merchants Association, calls the move "totally unreasonable." "DuringIndira Gandhi''s regime, Kamlapati Tripathi Committee Report recommended thatsales tax on papers be removed and merged with excise tax. It was a progressivesuggestion, but has not been implemented till now," adds Goel. In anage when the government and civil society groups are encouraging the use ofpaper bags instead of plastics, this proposal appears misplaced. "This willdissuade us from using paper bags," adds Rajaram.