Government considers banning e-commerce “gifts” to counter Chinese import tax evasion

By

Isabelle Crossley

Published
Nov 25, 2019

The government is reportedly debating removing its provision for allowing import shipments classified as “gifts” valued under Rs 5,000 ($69.78) to counter Chinese businesses allegedly avoiding import duties.

After reporting a high rate of customs avoidance among Chinese businesses importing goods into India, especially e-commerce fashion businesses, the government is considering doing charging customs on all shipments, ET Bureau reported. The Central Board of Indirect Taxes and Customs first considered limiting the number of gifts individuals can receive from abroad but concluded that it would be too challenging to implement. 

“We’re looking at a policy that prohibits the clearance of gifts altogether,” a government official told ET Bureau about the government’s gift import position. “Now policy-wise we’re planning in such a way that the gift word itself is removed… The policy can say clearance sought as gift is not permitted, or in other words, whatever you’re importing you need to pay duties and clear it.”

The government has already taken action in its major ports in Delhi, Mumbai, and Bengaluru and has notifies its other ports to scrutinise shipments coming in from China. The government has also previously seized shipments from Chinese online fashion retailers Club Factory and Shein for allegedly undervaluing clothing imports. The Department for Promotion of Industry and Internal Trade’s draft e-commerce policy is also expected to contribute to tackling the issue.