Govt gears up to restrict Chinese imports by banning e-comm gifts

In yet another move to escalate crackdown against Chinese e-tailers escaping custom duty and taxes, the Indian government is planning to completely remove the provision under which citizens can receive duty-free 'gifts and samples’ valued at under Rs 5,000 from abroad.

At present, gifts up to Rs 5,000 for personal use are exempted from customs duties. But Chinese e-commerce platforms have continuously been getting goods in the guise of gifts, according to customs officials.

The Central Board of Indirect Taxes and Customs (CBIC), which is responsible for administering Customs, GST, central excise, and service taxes in the country, was earlier looking to limit the number of gifts received to four by each individual.

However, it is getting difficult to implement this regulation practically. Hence, the officials have decided to implement a policy that prohibits the clearance of gifts altogether, cited in an ET report.

This move is a part of the Indian government’s strict action against all Chinese e-tailers who are escaping customs duty and taxes in the name of duty-free gifts and samples.

Notably, this is not the first instance by the Indian government against Chinese etailers violating the cross border trade law in the country.

In December last year, after the Mumbai customs department had noticed multiple consignments of goods in the guise of gifts, the government had stopped the import of goods through Mumbai.

Earlier this year, the government had imposed a clampdown on shipments of goods from Chinese e-commerce platforms to India as gifts.

Five months ago, Mumbai customs had also seized around 500 parcels of apparel and lifestyle e-tailers Shein and Club Factory by sealing its warehouse in the city since both the firms were found undervaluing and wrongly declaring goods to avoid customs duties.

Over the past couple of years, small traders and domestic e-tailers keep complaining against Chinese e-commerce companies for taking advantage of the exemption from customs duties.

Currently, around 6 million orders are placed on such platforms.

To keep a tab on companies, which are evading taxes, and monitor their business holistically, the Department for Promotion of Industry and Internal Trade (DPIIT) had asked global and local e-commerce companies to register themselves in India.