“Many suppliers have adjusted pricing to account for the ITC impact, which has resulted in an overall increase in paper prices,” says Mr. Hardik Shah, CEO -Sundaram Multi Pap

“Many suppliers have adjusted pricing to account for the ITC impact, which has resulted in an overall increase in paper prices,” says Mr. Hardik Shah, CEO -Sundaram Multi Pap

-“Where Paper mills do not supply at 0%, the effective loss of input tax credit (ITC) to manufacturers becomes a direct cost”
- Although finished books fall under a 0% GST bracket, the embedded tax cost on raw materials, especially paper, has not disappeared

As the GST new tax rate has been implemented for the last two months, The Pulp and Paper Times speak to Mr. Hardik Shah, CEO -Sundaram Multi Pap for his views on the post-GST regime impact on notebook manufacturers.

The Pulp and Paper Times

Q: What is the current scenario of notebook manufacturing post GST 2.0, on the demand and supply side?

Despite the GST 2.0 implementation, demand for notebooks remains strong and continues to grow. This is being driven by several structural factors such as expansion of educational schemes, opening of new schools, infrastructure upgrades, and increasing enrolment. Additionally, consumers — especially students and parents — are showing a clear preference for higher-quality notebooks produced by organized and branded manufacturers.

From a demand perspective, there has not been a noticeable decline or shift directly attributable to GST changes, largely because tax rates on end products have either remained similar or increased marginally. Therefore, consumption patterns have remained stable, and growth continues to be primarily education-led rather than tax-led.

Q: Are paper mills supplying paper at 0% GST to converters? If not, how are notebook manufacturers managing their production affairs?

Paper mills are currently not uniform in their approach. Some mills are supplying paper to converters at 0% GST, while others are still waiting. Where mills do not supply at 0%, the effective loss of input tax credit (ITC) to manufacturers becomes a direct cost.

In response, many suppliers have adjusted pricing to account for the ITC impact, which has resulted in an overall increase in paper prices. Manufacturers are therefore managing production by absorbing part of this escalation, recalibrating their cost structures, and in some cases renegotiating sourcing terms — but the input cost pressure is clearly visible across the supply chain.

Q: Is there any price increment on notebooks post GST in the market?

Yes, notebook prices have increased in the market after GST 2.0. The key reasons are twofold: first, the removal or reversal of ITC benefits has increased effective production cost; and second, paper prices have risen as suppliers pass on their ITC-related burden.

Although finished books fall under a 0% GST bracket, the embedded tax cost on raw materials, especially paper, has not disappeared — it has simply shifted upstream and is now reflected in higher product prices. As a result, the end consumer is ultimately bearing the impact through increased retail prices.

Q: The publishing season has started; how are the converters facing the challenges?

With the publishing and academic season underway, converters and notebook manufacturers are entering their peak production cycle under heightened cost pressure. The ongoing increase in paper prices is likely to strain margins and working capital, especially for smaller converters.

Some players may explore alternatives such as importing paper to control input costs or stabilize supply. However, import dependency brings its own challenges (pricing volatility, lead times, currency exposure), so it is not an ideal long-term solution. Overall, the season will be operationally manageable, but financially more demanding than previous years.

Q: Paper mills refrain from promoting paper sales for notebooks to prevent ITC reversal, and the Government does not seem inclined to change the slab for notebook paper. What will be your next step?

At present, paper mills are hesitant to actively push notebook-paper sales because supplying at 0% GST often leads to ITC reversal or loss for them. At the same time, the government has not yet shown willingness to revise the GST slab for notebook paper.

Our next step is continued and structured policy engagement. We are collectively requesting the government to reconsider the GST treatment of notebook paper, highlighting that the real burden is falling on the end user through higher retail prices. The industry’s action plan is to present clear data demonstrating how ITC loss and input tax distortions have inflated costs across the value chain, and to advocate for a correction that restores pricing stability and protects domestic manufacturing.

Q: Is the import of notebooks with 0% IGST into India impacting the market?

Yes, imports of notebooks at 0% IGST are beginning to affect the market. While the scale is currently limited, the trend is concerning. If corrective measures are not taken, imported ready-made notebooks could enter aggressively at lower prices, which would undermine Indian manufacturers.

Such a situation could lead to significant disruptions for local industry — including loss of market share, pressure on employment, and reduced investment capacity for domestic players. Strong and timely policy action will be necessary to prevent unfair market flooding and to maintain a level playing field.

Q: Any other special comment for the paper community?

My message to the paper and notebook community is that this is a moment for unity and coordinated representation. The industry needs to come together — mills, converters, and notebook manufacturers — to present a consistent and evidence-based proposal to the government.

A collaborative approach is essential not only to secure a rational GST structure but also to ensure long-term market health, affordability for students, and sustainability of domestic manufacturing.
 

Web Title: “Many suppliers have adjusted pricing to account for the ITC impact, which has resulted in an overall increase in paper prices,” says Mr. Hardik Shah, CEO -Sundaram Multi Pap