India government has reportedly brought imports and resellers of ecommerce platforms under the scanner for allegedly evading taxes while bringing goods into the country.
According to a media report which cited sources, shipments worth a few hundred crores of rupees have been stopped at the ports as the customs department has increased security to catch tax and duty defaulters, which has led to a delay in deliveries.
“We have no problems with goods being ordered from sites such as Amazon.com as, in those cases, duties and taxes are being paid at the time of purchase. But many importers/resellers on Indian ecommerce sites are evading duties by routing their goods through other countries other than the one which is the origin of these goods and operating warehouses in those countries. They are not even filling up the correct customs forms and under-declaring the value of these goods,” a senior customs official has reportedly said.
Prior to this, the government had scrutinised imports by Chinese ecommerce companies such as Shein and Club Factory. In June, Mumbai customs officials seized about 500 packages belonging to customers of Shein, and another Chinese etailer Club Factory. The government has begun a review of customs norms governing gifts and is of the view that a tighter framework is needed.
Following which, Chinese ecommerce platform Shein had shuttered operations partially and has begun refunding money to customers in lieu of pending orders.
Govt Regulations Around Ecommerce
The parliament has passed the Consumer Protection Bill, 2019 yesterday on August 6, which seeks to set up a regulatory body Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers.
Earlier this year, Indian government has implemented the FDI in ecommerce guidelines which had sought to enable a level playing field for online sellers and ecommerce marketplaces.
The rules had noted that a vendor will be considered “controlled” by an online marketplace operator if it sources more than 25% of its merchandise from an entity related to the ecommerce marketplace. It had also prohibited ecommerce marketplaces from directly or indirectly influencing the selling price of a product on their platform.
Further, the government has also been considering an ecommerce policy for the past few months, since the DPIIT has released the draft ecommerce policy in February.
The draft policy has proposed that companies should set up data centres in India for storage the data of Indian users. The draft also supports the review of the current practice of not imposing customs duties on electronic transmissions. It has also proposed constituting a dedicated ‘data authority’ for issues related to sharing of community data, among other proposals.