GST Rates and HSN Code 9502: What You Need to Know About Dolls and Toys

Toys and dolls have been an integral part of all our childhood, helping in imagination, creativity, and emotional expression in children. In India, the toy market has witnessed huge growth over the past few years with local players and online portals joining the race. One of the most crucial aspects of selling and taxing toys, especially dolls, is being aware of the right HSN code and the rate of GST to be charged.

One such major category is HSN Code 9502, specifically related to the dolls that look like human beings. This article outlines what this code is, its associated GST rate, and the impact it has on businesses as well as customers.

HSN Code 9502

HSN Code 9502 is applied to dolls resembling only human beings. These are:

1. Fashion dolls.

2. Baby dolls.

3. Character dolls resembling human-like.

4. Dolls with clothing, furniture, or accessories included packed in.

These dolls may be made of any substance such as plastic, rubber, cloth, or even electronic parts, provided that their main purpose is that of a human-symbolizing doll.

It is also to be noted that the dolls in this code are to be human-like. Those toys with animal shapes or mechanical robots which don't resemble humans are coded by some other code.

GST Rate on Dolls under HSN Code 9502

The GST rate is fixed by the Indian government at 18% for all products that fall under HSN Code 9502. Both dolls that are imported and made domestically will be charged with this rate. The rate includes:

9% Central GST (CGST)

9% State GST (SGST) on intra-state sales

18% Integrated GST (IGST) on inter-state or import sales

A quick reference table is provided below:

Product Type	HSN Code	GST Rate	Applicable On
Fashion Dolls	9502	18%	All types, whether Indian or imported
Baby Dolls	9502	18%	Including accessories sold with the doll
Character Dolls (Human)	9502	18%	Includes popular animation or movie characters
Doll Accessories (Sold with Doll)	9502	18%	Furniture, clothing etc., if bundled with doll

Note: It provides the same rate of taxation that ensures uniformity and improved pricing throughout India.

Significance of proper Classification

It is essential for traders to use the correct HSN code properly. Misclassification of products can earn tax penalties or retrospective charges. Correct classification under HSN Code 9502 not only avoids legal trouble but also gets the advantage of Input Tax Credit (ITC) on raw materials like plastic, paint, packaging material, and electronic component parts.

Accurate classification also facilitates accurate GST billing and return filing, reducing compliance issues, especially for new businesses and small retailers.

Advantages of GST on Dolls

Uniform Taxation: The biggest advantage of a single GST rate is single pricing across the country. Regardless of whether the doll is bought in Kerala or Delhi, the GST rate is the same, and thus there is transparency.

Input Tax Credits: Producers can avail of ITC on raw materials and inputs. This reduces the tax burden and enhances efficient production methods.

Less Accounting and Compliance: One rate entails less accounting. The companies do not have to account for differential VAT or excise duty depending on state or type of doll.

Easy Online Sales: With clear GST rates and easy classification, online sellers can price and list their products with greater confidence. This simplifies national accessibility and consumer confidence.

Transparency of Foreign Traders: A transparent and stable GST regime also simplifies it for international brands and importers to understand Indian market requirements and make compliance and pricing decisions in advance.

Business Challenges

Even with the benefits of the GST regime, there are some challenges that still exist:

Higher GST Rate Perception: An 18% rate would be considered too high for toys, especially for price-conscious consumers. It may raise the final retail price for certain dolls.

Confusion regarding Classification: At times, firms are unsure if a product is a doll in 9502 or an action figure or toy under some other HSN classification.

Small Seller Burden of Compliance: GST registration, invoicing, and GST returns can seem intimidating for small-scale manufacturers or home-based artisans without clear advice.

Market Growth and Opportunity

While there are certain limitations, the Indian toy market is performing extremely well. Indian designers and a number of start-ups are launching culture-based dolls showcasing Indian festivals, attire, and languages. The 18% GST regime clearly demarcated under HSN Code 9502 has brought in order and predictability to this new industry.

The growth of online shops has allowed the export of Indian dolls from far-flung areas to city dwellers, and vice versa. Transparency in taxes made it easy for such e-transformation. International manufacturers of toys also look towards India due to the huge market and the availability of a consistent GST policy that ensures smooth import of commodities into the nation.

Conclusion

Toys and dolls, as they come under HSN Code 9502, are subject to a single tax rate of 18%. This coding is easy enough for manufacturers, sellers, and importers to comply with. While the tax rate might be high from the point of view of some companies, overall transparency and uniformity in the GST system enable the toy industry to grow in a systematic manner. With increasing Indian consumption of toys and emphasis on indigenous production, a proper understanding of this code will lead to more effective pricing decisions, improved compliance, and well-informed business choices.

Suggested Read: Top Toy Manufacturers/ Companies in India