Chinese Etailers Still Misusing Indian Laws, Says LocalCircles

After the central government recently released its draft ecommerce policy, citizen engagement platform LocalCircles has now discovered that China-based ecommerce companies are yet misusing the laws and are shipping the products in the country as gifts.

In a letter addressed to DPIIT, the organisation has said that though the department’s initiatives have led to 60% of the reduction in the incidences of the commercial shipment being delivered as a gift at the Mumbai customs port, however, it is still happening.

“LocalCircles through its research has found out that commercial shipments coming as gifts at the Mumbai port have now reduced by almost 60% but are still entering India through various other ports like Delhi, Bengaluru, Kochi, Chennai etc. and through the Indian postal channel,” the letter noted.

The company has requested the department to intervene and work with the relevant authorities to initiate enforcement exercises at these locations. Apart from DPIIT, the letter was also sent to the Department of Posts, Ministry of Commerce, Central Board of Indirect Taxes & Customs, Reserve Bank of India, Suresh Prabhu, minister of commerce and industry, Arun Jaitley, minister of finance and corporate affairs, and Manoj Sinha, minister of state (communications).

While speaking with Inc42, LocalCircles founder Sachin Taparia explained that the Indian postal system is currently independent of customs. A shipment does not get inspected until the postal service presents it to the customs officers. Thus the organisation has asked the department to initiate action against these incidences.

This is the second letter by LocalCircles regarding the problem. The organisation had written to Anup Wadhawan, secretary, Ministry of Commerce and Industry highlighting the similar issues in September 2018.

Other Appeals Against Chinese Apps

In December 2018, Swadeshi Jagran Manch (SJM),the economic wing of Rashtriya Swayamsevak Sangh (RSS), had said that the Chinese ecommerce companies receive more than 200K orders per day in India and also alleged that these companies are delivering goods via couriers and postal gift shipments in order to bypass and evade a range of Indian laws on payment gateways, custom duties and GST.

Currently, India’s import rules exempt gifts worth INR 5,000 and less from customs duties. This rule is allegedly being misused by the Chinese etailers who are delivering commercial shipments in disguise of a gift to avoid taxes.

In order to keep a check on this, the government has been considering limiting the value of imported gifts to INR 5,000 ($71.5) per Aadhaar number to keep a tab on the purchase of goods from foreign ecommerce companies.

Last month, the Confederation of All India Traders (CAIT) and SJM also announced their boycott against the Chinese goods.

Apart from the ecommerce companies, China-based social media applications and telecom gear makers are also under scrutiny. Post Pulwama terror attack, SJM had written to Prime Minister Narendra Modi, requesting a ban on Chinese social media apps, ecommerce platforms and telecom equipment.

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