GST Rate Cuts Make Notebooks and Pencils Cheaper; Positive for Stationery Majors
- 4th September 2025
- 12:30:00 PM
- 3 min read
Summary
From September 22, the GST Council will exempt notebooks, pencils, erasers and sharpeners from tax, while reducing rates on geometry and colour boxes. The cuts are set to lower education costs for households and support demand for listed stationery companies including DOMS Industries, Navneet Education and Kokuyo Camlin.
Mumbai | September 4 – The Goods and Services Tax (GST) Council has announced sweeping reductions in tax rates on school and study essentials, a move that will directly ease household budgets and potentially lift demand for stationery companies.
From September 22, 2025, the following changes will apply:
- Nil GST: notebooks, exercise books, graph books, pencils, crayons, pastels, erasers, sharpeners, printed maps, atlases, globes.
- 5% GST: mathematical boxes, geometry sets, colour boxes (down from 12%).
The decision is part of a broader GST reform that simplifies the current four-tier structure into two slabs of 5% and 18%, with a new 40% rate carved out for luxury and demerit services.
Lower Costs, Higher Volumes
By exempting and reducing tax on everyday study items, the Council aims to cut expenses for students and families. This is expected to spur volumes in the stationery segment, which is dominated by organised players such as DOMS Industries, Navneet Education, Kokuyo Camlin, Sundaram Multi Pap, and ITC’s Classmate brand.
Implications for Listed Companies
For DOMS Industries, which has been delivering strong growth, the timing of this tax cut is favourable. The company recently reported Q1FY26 revenues of ₹5,623 mn, up 26.4% YoY, with robust performance in its core stationery segment. Expanding product launches and wider distribution (20,000 new touchpoints in the last year) place DOMS in a strong position to capture incremental demand. PL maintains a BUY rating with TP of ₹3,087, implying further upside.
Peers such as Navneet Education and Kokuyo Camlin are also likely to benefit from improved affordability and higher sales volumes during the back-to-school season and festive periods.
The rate cuts on stationery sit alongside wide-ranging GST rationalisation aimed at reducing complexity and supporting consumption. While the changes may result in short-term revenue loss for the exchequer, the Centre expects higher demand to offset this through greater compliance and expanded tax base.
Outlook
The move provides immediate relief to families and strengthens growth visibility for stationery companies. With a favourable policy backdrop, demand recovery, and rising penetration in tier-2 and tier-3 cities, organised players are expected to consolidate their market position.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
