The Association of Indian Magazines (AIM) has sought the government’s intervention to salvage the magazine publishing sector, which is witnessing almost zero income due to the impact of Covid-19, and has suggested a seven-point action in a letter written to Finance Minister Nirmala Sitharaman.
Thanking the Finance Minister for reducing customs duty on newsprint from 10% to 5%, which provided some relief to magazine publishers, AIM said magazines play a very important role in the society by serving millions of readers with 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 the dissemination of knowledge, our constitution has provided many concessions to magazines and are always treated on a par with newspapers,” the association said in the letter signed by its President R Rajmohan.
Explaining the plight of the magazine industry that has been hit by the lockdown to contain the spread of the coronavirus, AIM said, “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 cost, resulting in low or no profitability for magazine publishers.”
“Covid-19 and the lockdown have cast its shadow on magazine publishing and thrown our business completely out of gear. Though classified as 'essential services’, distribution of magazines has been severely hampered during the lockdown,” AIM said.
Talking about how the delivery of magazines has been paralysed by the lockdown, the association said, “Most magazines are printed in one city and transported to other states through Railways. 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 the country, to take drastic steps like slashing the number of pages and skipping issues.
AIM stressed the need for a bailout package from the government as these measures will not suffice and the survival of magazines will be difficult given the severity of the problem.
The association suggested a seven-point action plan to the government in order to resurrect the magazine industry.
1. Remove the remaining 5% customs duty on newsprint. (Before the Union Budget 2019-20, there was no customs duty on newsprint).
2. Withdraw GST on newsprint or at least make GST on LWC (paper used by magazines) on a 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 up to 70 gsm had no duties or taxes, whatsoever, for end-users).
3. Tax holiday for two years.
4. Allocate 10% of the BOC (DAVP) budgets to magazines.
5. Soft loans for two years at 5% interest, with a moratorium for six months.
6. Bring down 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).
7. Reduce GST on events conducted by magazine publishers to 5%. (Our events are an extension of our content and we have created them to engage with our readers further).