Goods & Services Tax (GST) Rates on Toys Goods
Toymakers have asked the government to roll back the proposed Goods & Services Tax (GST) rates on toys stating that the high rates would adversely impact the industry.
They have also demanded one slab tax rate for the whole toy category to prevent misinterpretation and harassment by revenue authorities.
The GST Council has finalised three different tax rates for toys. While the traditional toys have been put under the 12% bracket, electronic toys will attract 18% tax. Educational games like scrabble or chess will now attract 28% tax. This category is currently exempted from any tax.
Currently, the taxation on toys is approximately 6.5% and post GST implementation, the tax rates would go up significantly, industry officials said.
Ishmeet Singh, Country Manager, India, Mattel Inc. said, “Increase in the overall tax rate and multiple rates within the toy category will impact the toy industry. Prices will go up by at least 10%.”
“Toys and games add to the overall learning and development of children. That is why the government had exempted excise duty on toys. Now in the GST regime, they have been burdened unfairly with higher taxation. If implemented this is bound to raise prices as the industry has no capacity to absorb the additional burden.”
John Baby, Managing Director, Funskool said, “There has to be one rate for the category. Without this there will be a lot of disputes and misinterpretation which will lead to harassment by tax officials.”
“All over the world developmental aids for children are given preferential treatment and India should do the same. How can the government tax developmental aids for children at the highest tax rate of 28%?”
Vivek Jhangiani, The All India Toy Manufacturers’ Association said, “The proposed GST rates are going hurt the toy industry. The proposed three rates are against the principles of GST of one product group, one rate.”
The body urged the Centre to correct the rates to a uniform rate for all products. It is making a representation to the GST Council on the same.
Source – http://www.thehindu.com