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Body blow for Chinese e-commerce companies as Indian government bans 'gift' route

Import of goods as gifts with payment of full applicable duties is allowed, the notification said.

Dec 13, 2019 by The Passage Team
Body blow for Chinese e-commerce companies as Indian government bans 'gift' route

Tyler Casey/Unsplash

Indian government has amended the Foreign Trade Policy 2015-20 to check the import of goods from Chinese e-commerce companies through gift route. Such duty-free imports will no longer be cleared by Customs, the government said in a notification on Thursday.

“Import of goods, including those purchased from e-commerce portals, through post or courier, where Customs clearance is sought as gifts, is prohibited Excepts for life saving drugs/medicines and Rakhi (but not gifts related to Rakhi). Import of goods as gifts with payment of full applicable duties is allowed,” the Directorate General of Foreign Trade said in a notification.

Indian media had reported on Chinese e-commerce businesses including Club Factory, Shein and Aliexpress avoiding customs duties and taxes by exploiting the gift route, keeping the prices at a minimum. Indian government doesn’t slap import duties on gifts up to Rs 5000. The provision was put in place to let NRIs (Non-Resident Indians) send goods and chattels back home without the burden of the tax.

It all started as a discussion thread in an online consumer forum of LocalCircles last July. Scores of consumers claimed they did not receive invoices for deliveries from Chinese e-commerce platforms. The absence of MRP labels on products also raised a few eyebrows. LocalCircles acts as an interface between consumers and government departments including the Department of Consumer Affairs, Railways and Department of Urban Development.

When a consumer orders a product from a Chinese e-commerce app, it is generally delivered at his/her doorsteps via China post and India Post or sent with the consolidated shipment through a courier logistics company and an importer on record in India, said a report by LocalCircles.

Gifts, commercial samples and low-value dutiable consignments (commercial shipments upto worth Rs 100000 and liable to be charged duty) were cleared faster through an express route

The Passage Team

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