Toy industry seeks resolution of GST anomaly, PLI scheme

Toy manufacturers have urged the government to resolve a GST (Goods and Services Tax) anomaly and immediate roll-out of the production linked incentive scheme to boost the growth of the sector.

These issues were raised by the industry during a meeting called by the Department for Promotion of Industry and Internal Trade (DPIIT) on July 8 here. The meeting was attended by representatives of global and domestic toy manufacturers, retailers, associations, and government officials to discuss the opportunities in the domestic toy sector. It was chaired by DPIIT Secretary Rajesh Kumar Singh. Toy Association of India (TAI) Senior Vice-President and Little Genius Toys CEO Naresh Gautam, who attended the meeting, said that besides PLI and GST, the industry has urged for resumption of Credit Linked Capital Subsidy Scheme (CLCSS).

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“PLI is the need of the hour as it would help in tapping huge business opportunities,” Gautam, who has been making wooden toys for the last 32 years, said. He added that it is a labour intensive sector and support measures by the government would help in creating jobs and increasing exports. “We train unskilled people for jobs, particularly women workers. We are more competitive than China,” Gautam said. Another industry official said that the meeting was a major platform to interact with the government, global players and domestic manufacturers. Sharing similar views, Toy Association of India Chairman Manu Gupta said that a lot of issues were raised such as standard input output norms (SION) for all toys, and resumption of credit linked capital subsidy scheme.

“On GST, we asked for the removal of an anomaly,” he said. Explaining the issue, he said mechanical toys attract a 12 per cent GST, and the tax on electronics toys is 18 per cent, “so if we add merely some light or music in a mechanical toy, that toy is classified as electronic toys. This is an anomaly and we have urged for its removal”. Amitabh Kharbanda, Promotor of Sunlord Group, said that GST issue resolution will be a “great” help for the sector. “There is a need to simplify procedures for imports of raw materials. CLCSS also needs to be resumed. We need support from the government to give training to workers,” he said, adding an institute for the sector like Footwear Design and Development Institute is also important for the sector.

“Indian toy market size is Rs 16,000 crore and over USD 120 billion is the global market size. India’s share is 0.5 per cent only and if we increase our share, it will have a significant impact on the industry,” Kharbanda said. There are over 9,600 registered MSME toy manufacturing units, and 8 GI (geographical indication) toy clusters in the country. The event saw participation from over 50 domestic manufacturers such as Playgro, Sunlord, Micro-Plastics, Aequs, Funskool and Dream-Plast.