Pen manufacturers have reached out to the government seeking a reduction in Goods and Services Tax as higher taxes have escalated costs and hit sales after the government recently clubbed all pens under the 18% GST bracket.
Earlier, only fountain pens and stylograph pens fell under the 18% GST category, while ball point pens were taxed at 12%.
Industry trackers say that the low cost pens have high price elasticity and slightest increase in the cost results in disproportionate reduction in sales.
“Pen industry has been badly hit during the pandemic and has not recovered as schools and offices are not yet fully operational. This additional tax burden will give further irreversible pain to the Indian manufacturers,” said Rajesh Rathod, President, Writing Instruments Manufacturing Organisation (India).
Two associations Tamil Nadu Pen Manufacturers and Vidarbha Pen and Stationers Associations have written to the finance ministry in this regard.
The government recently said that beginning October this year all pens will be taxed at 18%.
All pens including ballpoint pen, felt tip, other porous tip pens, markers, pen holders, pencil holder, similar holders including caps and clips now fall under 18%.