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Government launches crackdown on Chinese imports evading tax

Published
today Apr 5, 2019
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The government has launched a crackdown on Chinese imports from e-commerce platforms that enter India without paying due customs duty and tax. Chinese value fashion retailers have been accused of wrongly marking items as gifts to import them for free.


Chinese value fashion retailers are accused of purposefully avoiding customs duty on Indian imports - Club Factory


Chinese value fashion retailers including Shein, Club Factory, and AliExpress have been accused of taking advantage of India’s customs regulations to import clothing for free. In India, gifts valued at under Rs 5,000 ($72.24) do not accrue customs duties. Sources told that businesses are importing items marked as “gift” under the threshold to avoid due tax.

Two sources told ET Bureau that the central government is working to combat this issue and sent letters to tax and customs officers, the post office, and courier companies to ask them to monitor shipments from China. “Up until now, customs department was asked to undertake strict action, now even post office would be asked to scrutinise such purchases,” said one of the sources. 

The Department for Promotion of Industry and Internal Trade has also asked authorities in ports across the country to check shipments from China marked as a “gift”. The government has stopped imports through Mumbai and plans to do the same in Chennai and Kolkata, the sources said. The government also recently made it mandatory for Chinese e-commerce firms operating in India to register in India. This could make domestic laws applicable to the businesses. 

“Investigations revealed that at its peak anywhere around 200,000 orders were placed every day through Chinese e-commerce platforms in India which escaped any form of taxes, which are otherwise applicable on imports,” another source told ET Bureau. “After a major crackdown, this has now come down to around 120,000 orders per day but that too is high and the government wants that all major ports across India intensify their checks to stop such practices.” 

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