Mumbai customs seizes parcels of Shein and Club Factory's local unit over tax evasion

In another crackdown on Chinese e-tailers, Mumbai customs has seized around 500 parcels of apparel and lifestyle e-tailer Shein and sealed its warehouse in the city.

The department had found them undervaluing and wrongly declaring goods to avoid customs duties.

According to seizure order against Shein, the packing of goods looks like of B2C model but the clearance is being sought for B2B model, reports ET.

Apart from Shein, the customs official also seized a small number of parcels from Club Factory's local unit Globemax.

The move was part of the Indian government's strict action against all Chinese e-tailers who are escaping custom duty and taxes in the name of duty-free gifts and samples.

To curb such practices, the government had already asked post office and courier firms to keep an eye on shipments from China.

Chinese e-tailers employ importers such as Sino India Etail and Globemax to bring in goods ordered by their customers into India in bulk to avoid cumulative 42.08% duty levied on individual imports.

Currently, India exempts items valued up to Rs 5,000 from all taxes to allow Non-resident Indians to send gifts to their families.

Responding to the development, Shein said to ET that it had always abided by the laws and paid all our taxes correctly and timely. Reaction from Club Factory on the matter is still awaited.

This is not the first instance of trespassing Indian laws on import goods. In December, the Mumbai customs department had noticed multiple consignments of goods in the guise of gifts with fictitious addresses.

The incident forced the government to stop the import of goods through Mumbai and it is planning to take similar clampdown on ports in Chennai and Kolkatta.

Sellers body AIOVA and citizen engagement forum LocalCircles had also sought to curb these practices and right imposed of duty on these platforms.