India Cracks Down On Foreign Ecommerce Orders
Since early last year, Chinese ecommerce companies such as Shein, ClubFactory and others have been under the scanner of authorities in relation to evading customs duty on various goods under the guise of gifts. Authorities alleged misusing the provision that allowed Indians to receive duty-free ‘gifts and samples’ valued at under INR 5K from other countries.
Last November, the central board of indirect taxes and customs (CBIC) had completely revoked this since the existing option to limit the number of gifts to four per individual was impractical and very difficult to implement.
Then in December, the directorate general of foreign trade under the ministry of commerce prohibited the import of goods under ‘gifts’ through a notification. “Import of goods, including those purchased from ecommerce portals, through post or courier, where Customs clearance is sought as gifts, is prohibited except for life-saving drugs/medicines and Rakhi (a sacred thread tied by a sister to her brother on occasion of Raksha Bandhan).”
The notification further clarified that a gift with rakhi is also prohibited. Hence, the import of goods as gifts with “payment of full applicable duties is allowed”.
Earlier this month, Chinese ecommerce platform Shein’s importer Sino India Etail withdrew its petition against the Indian customs department for seizing packages and sealing its warehouse in Mumbai. Sino India Etail was charged by the customs department in June 2019 for labelling the products dispatched for customers in India as a business-to-business (B2B) transaction.