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Southern States - Tamil Nadu

T.N. move for entry tax on newsprint `regressive'

NEW DELHI APRIL 29. Pratap G. Pawar, president of The Indian Newspaper Society, has expressed serious concern over the Tamil Nadu Government's move to impose an entry tax on newsprint. The State Government, in its budget for 2002-2003, has sought to impose a four per cent entry tax on newsprint. Mr. Pawar recently submitted a memorandum to the Tamil Nadu Chief Minister, Jayalalithaa, pleading against the move, which will affect newspapers adversely. He added that in one of its judicial pronouncements relating to the imposition of certain duties on newsprint, the Supreme Court had observed that a tax on newsprint amounted to a ``tax on knowledge and a burden imposed on the readers''.

Mr. Pawar said the newspaper industry was at present confronted by multiple crises arising from the implementation of the Manisana Wage Boards' Awards, the need for withdrawal of Customs duty on newsprint, unremunerative DAVP rates, a steep decline in advertisement revenue and competition from the electronic media. Moreover, newspaper economy was rather fragile, and mainly dependent on the price of newsprint which constituted 60 to 65 per cent of the turnover.

``The imposition of entry tax will place the newspapers in Tamil Nadu at a disadvantage vis--vis their counterparts in the rest of the country,'' it was pointed out, adding, "...the move to levy entry tax on an essential commodity like newsprint is highly arbitrary; particularly when States in which some major newsprint mills are situated, such as Karnataka and Kerala, do not levy entry tax on newsprint''.

While the levy on newsprint was not warranted, extending it to imported newsprint would amount to violating the Constitution as interpreted by various courts, he said.

The Central Sales Tax Act and all the States' Sales Tax Acts exempt newsprint from sales tax. Taking the Supreme Court judgments into account, the Government of India had restricted the levy of Customs duty on newsprint to five per cent only.

While the whole country was moving towards rationalising the sales tax structure and implementing VAT (value-added tax), the Tamil Nadu Government move was regressive, Mr. Pawar said and pleaded for its immediate withdrawal.

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