Updated on July 10, 2025 11:10:30 AM
The Goods and Services Tax (GST) has made India's taxation system more streamlined by consolidating different indirect taxes into a single umbrella. For companies trading in electronic toys, sports equipment, and games, it is important to know the relevant HSN (Harmonized System of Nomenclature) codes and GST rates for hassle-free operations, correct invoicing, and tax compliance.
Battery-operated vehicles, remote-controlled aircraft, and educational gadgets are listed under certain HSN categories and tend to be rated at 18% GST in general. The rates ensure that tax treatment is standardized across states and pricing transparency is maintained. Conventional toys would fall in other categories and might be rated with lower GST, based on the type of material used and functionality.
In the same manner, sporting items such as cricket bats, footballs, badminton rackets, and gym equipment fall under varied HSN codes, typically under the chapter title 9506. The majority of these items are subject to GST rates of between 12% and 18%, varying based on use and type. For instance, sporting equipment in general might receive a reduced tax rate compared to electronic fitness equipment.
Board games, video game consoles, and other leisure items are also included in Chapter 95, with the majority of them drawing 18% GST. Having the right HSN code prevents penalties and ensures proper GST return filing.
HSN Code, or Harmonized System of Nomenclature, is an internationally accepted system created by the World Customs Organization (WCO) to classify goods systematically. It is applied in more than 200 countries to provide consistency in identifying and taxing products during trade, customs, and invoicing activities. In India, HSN codes are implemented under the Goods and Services Tax (GST) system to classify goods and allocate relevant tax rates.
Every HSN code is either a 6 or 8-digit number where the first two digits point towards the product chapter, the next two towards the heading, and the rest towards the subheading and product detail. For instance, HSN code 9503 is for toys, whereas 9506 is for sports goods.
Applying the proper HSN code is important to enable companies to bill GST accurately, claim Input Tax Credit (ITC), and avoid a fine. It also makes compliance easy by streamlining product classification among industries and across regions.
Electronic toys are a trending segment in the Indian toy market, comprising battery-operated vehicles, learning devices, speaking dolls, and remote-control toys. In the GST regime, all these toys are categorized under HSN code 9503, which is specially designed for battery or electrically operated toys and models.
Electronic toys are among the fastest-growing segments in the toy industry. These include battery-operated, remote-controlled, and app-enabled toys.
| Item | HSN Code | GST Rate |
|---|---|---|
| Battery-operated toys | 9503.00.30 | 18% |
| Remote-controlled cars, drones | 9503.00.90 | 18% |
| Educational electronic toys | 9503.00.10 | 18% |
| Video game consoles (non-portable) | 9504.50.00 | 18% |
Sports equipment is a generic category that encompasses products for sports such as cricket, football, badminton, tennis, and exercise like weight training and yoga. Under the GST system, the majority of sports equipment falls under the HSN code 9506, encompassing products for sports and physical exercise or recreational training used outdoors and indoors.
The GST rate for sports items also differs based on the nature of the product. Simple, non-electronic sports items such as balls, bats, nets, and racquets are commonly charged a GST rate of 12%. While sophisticated or electronic fitness products, i.e., motorized treadmills or intelligent fitness devices, may incur a higher GST rate of 18%.
The proper use of HSN code is imperative for sports equipment manufacturers, suppliers, and retailers in order to bill tax accurately and avail Input Tax Credit (ITC) wherever possible. This minimizes the total tax expenditure and ensures GST compliance.
The rollout of GST in India has greatly influenced the toy and sports goods industry, offering both opportunities and challenges. Earlier, the industry was plagued with various taxes like VAT, excise duty, and sales tax, making pricing and compliance cumbersome. With GST, the industry is now working under one tax system, with more streamlined processes and uniform tax rates nationwide.
For toys, battery-operated or electronic toys draw a more substantial GST rate of 18%, whereas conventional toys usually receive 12% GST. This change has resulted in increased prices for electronic toys, which may influence the retail prices. On the brighter side, the Input Tax Credit (ITC) mechanism in GST makes manufacturers eligible for tax credits on taxes incurred on raw materials and parts, which lowers their total tax cost.
Likewise, sports equipment is taxed at 12% GST for simple products and 18% for sophisticated electronic devices such as fitness trackers and intelligent sports equipment. The GST regime has spurred formalization within the sector, curbing tax evasion and facilitating transparency in pricing and trade.
Conclusion
GST has made the process of taxation for the toy, sports goods, and games sector uniform and transparent, simplifying the process. Proper use of HSN codes ensures tax compliance by businesses, saving them from penalties and the advantage of availing of the Input Tax Credit (ITC) facility.
For electronic toys, falling under HSN code 9503, the 18% GST rate has provided a sense of clarity to prices, albeit at higher consumer costs. Conversely, conventional toys, which usually pay 12%, have experienced comparatively lower charges. Likewise, sports goods, grouped under HSN code 9506, are usually taxed at 12%, while some electronic and high-tech equipment attract higher 18% GST rates.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
Frequently Asked Questions (FAQs)
The raw cotton GST rate is 5%, classified under HSN code 5201.
No, raw cotton attracts a tax of 5%. Previously, it was partially exempt from VAT; GST introduced across-the-board taxation.
Cotton yarn is classified under HSN code 5205 and attracts a 5% GST rate.
Cotton fabrics are classified under HSN codes 5208 to 5212 and are taxed at a general rate of 5%, except for processed or mixed varieties that could have 12% GST.
Waste cotton is under HSN code 5202 and has a 5% GST rate.
Yes, exporters are eligible to claim Input Tax Credit (ITC) and receive a GST refund on inputs utilized in manufacturing/exporting cotton products.
Yes, every trader with a turnover exceeding the GST threshold is required to comply, though composition schemes and exemptions hold in some instances.
Yes, GST substituted several taxes with a single structure, enhancing clarity and minimizing the cascading effects of taxation.
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