Differential duty structure a key challenge for toy industry: Study
18/08/2016 14:30
Due to inverted duty structure, India’s toy industry which is dominated by the micro, small and medium enterprises (MSMEs), is struggling hard for their survival due to heavy imports duty, reveals ASSOCHAM latest statement. The paper on Indian toy industry brought out by ASSOCHAM has stated that though the toys, games, sports equipments, parts & accessories are classified under HSN Chapter Heading 95, many of the raw materials used in the manufacture of these toys fall under different Chapters and are levied different rates of Import Duty, thereby, the input cost of toy manufacturing in India is way high compared to imported toys. The chamber further states that almost all parts used in toys are specifically classified in classification other than toys parts, so each toy part must fall under its specific classification such as, a toy motor must fall under the classification of motors are not toy parts; same is true for screws etc. The duty on such parts can be 0,5,7,5 and 10 percent + CVD. Also the Customs duties on toys may vary from 0 to 10% with exceptions. There is an anomaly —importing of toy attracts 5% duty, whereas importing raw materials for domestic manufacturing attracts 20-30% duty, making domestic production costlier,” said Sunil Kanoria, President ASSOCHAM. It may be interesting to note that for a zero duty on parts, the effective rate of duty on such a part is more than twice that of a finished toy, said Kanoria. The Indian toy industry caters to nearly four crore kids in the age group of 12 years across the country but domestically manufactured toys account for a meagre 15 per cent of the market and the rest of the market is flooded with imported toys from countries like China, the United States (US), the UK, Korea and Malaysia among others. ASSOCHAM suggests the government should undertake some training programmes and set up training centres for these workers to train them so that they are able to increase their efficiency and productivity. Marketing tie-ups for the toy industry both at the state as well as the national levels are suggested by ASSOCHAM.
