Magazine publishers write to FM, seek bailout package
After various media industry bodies writing to the Government for relief amid the COVID-19 crisis, now the Association of Indian Magazines (AIM) has written to Finance Minister Nirmala Sitharaman seeking urgent relief and urged her to save the sector from extinction.
In the letter, R Rajmohan, President, Association of Indian Magazines (AIM), mentioned how the magazine industry has been going through hard times, with advertising revenues declining 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,” Rajmohan stated.
Writing further, he pointed out, “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 the 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.”
AIM suggested the following measures to salvage the magazine publishing sector:
- While thanking the Minister for reducing the Customs Duty on newsprint, from 10% to 5%, AIM sought the removal of the remaining 5% Customs Duty on Newsprint. (Before the Union Budget 2019-20, there was no Customs Duty on Newsprint.)
- Withdrawal of 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 deﬁniRon of ‘Newspapers’. (Prior to the introducRon of GST, LWC upto 70 gsm had no duRes or taxes, whatsoever, for end users.)
- Tax holiday for two years.
- Allocating 10% of the BOC (DAVP) budgets to Magazines.
- Soft loans for two years at 5% interest, with a moratorium for 6 months
- Bringing 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)
- Reducing 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.)
Rajmohan reiterated the important role that magazines play 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,” he pointed out.