Hike in Customs duty: Toy retailers stare at shortage in three months

Topics Customs duty

A national body of toy traders, United Toys Association, on Monday said there could a shortage of toys in three months if the government persisted with its decision to hike Customs duty on the product. 

To promote local manufacturing, Finance Minister Nirmala Sitharaman had increased Customs duty on imported toys from 20 per cent to 60 per cent during the Budget. This is the second hike in two years for toys. In 2018, the government had increased the Customs duty to 20 per cent from 10 per cent. 

Almost 85 per cent of toys in India are imported, while the rest is manufactured in the country. 

While toy makers such as Mattel, Funskool, Hasbro, and Hamleys are impacted by the hike, none of these companies are part of the agitation yet.

“At this point the entire sales chain from distributors, who import the toys, to wholesalers and retailers, are part of the agitation,” said Rehan Dhorajiwala, spokesperson, United Toys Association. 

“Not only do distributors have to pay the hike in Customs duty, but there is also a GST of 18 per cent that is levied on products. How do you do business with such steep duties?” said Dhorajiwala. 

Dhorajiwala said the increase in product prices would be to the tune of 75-100 per cent, putting products out of reach of consumers. 

Last week, the Association had written a letter to the commerce ministry asking it to withdraw the latest hike. The apex body, said Dhorajiwala, was also in touch with regional chapters to continue the stir.

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