The government will on Thursday talk to e-commerce giants on the ways to crack down on Chinese players like AliExpress, Club Factory and Shein, which evade duties by misusing the “gifts” provision under the Customs law.
The meeting, called by the Central Board of Indirect Taxes and Customs, will see representation from e-commerce players like Amazon and Flipkart besides courier companies like FedEx and DHL among others.
A customs provision allows up to Rs 5,000 tax exemption on gifts and Rs 10,000 for trade samples sent to India from abroad.
“We are examining policy-level solutions to the issue of misuse of ‘gifts and samples’ provision and ‘low-value import’ route under the customs law. Already Mumbai, Bengaluru and Delhi ports have cracked down on such shipments,” said a government official.
The government is examining putting an annual cap on the number of gifts or samples an individual can receive from abroad. “People receiving trade-related samples should not get impacted as it will hit business sentiment,” said another official.
An audit or return-filing mechanism, through a central registration system, for foreign online retailers catering to Indian buyers is another option being examined.
A tech-enabled payment gateway solution will ensure that duty and integrated goods and services tax (IGST) is paid at the time of online payment by the buyer. Besides, another option of a central registration system will require these foreign players to file returns specifying description of goods sold and the duty and IGST credited to the government on a daily or weekly basis. There could be routine audits based on such return filings.
“Pre-payment by customers is an option. A flat customs plus IGST rate, a mandatory integration between payment gateways like UPI, Bhim, Aadhaar Pay and the customs systems such that an id can be generated to track the payment and consignment. This will ensure that when it arrives it automatically gets processed at customs,” said Sachin Taparia, founder and chairman, LocalCircles.―Business Standard