Govt Cracks Down On Chinese E-commerce Firms To Check Tax Evasion

In an attempt to clampdown on tax evasion, the government has launched a massive operation against purchases of goods from Chinese online platforms that were dodging customs duty and goods and services tax. It may be noted that many online purchases from China entering India as gifts and being shipped directly to customers. At present, Indian customs rule allows tax exemptions on gifts sent to relatives from Indians living abroad for up to Rs 5,000.

After sending letters to the tax officials and customs officers, the Centre has directed the post office and courier companies to check thoroughly shipments from China, the ET reported, citing two people familiar with the development.

The daily quoted a person aware of the matter as saying, “Up until now, the customs department was asked to undertake strict action, now even post office would be asked to scrutinize such purchases.” Besides, the Department for Promotion of Industry and Internal Trade (DPIIT) had asked all ports across the country to check if the shipments were authentic gifts.

As per the report, the Centre had stopped the import of goods through Mumbai and is now considering starting similar restriction across India and other ports including Chennai and Kolkata.

Chinese etailers such as Club Factory, AliExpress and Shein were allegedly misusing the rules to take advantage of the exemption from customs duties on gifts of up to Rs 5000.

A highly reliable source told the daily that investigations revealed that around 2,00,000 orders were placed every day through Chinese websites in India which evaded any form of taxes, which are otherwise applicable on imports. Following the government’s stern action against illegal orders, it has now dropped to around 1,20,000 orders per day.

Also, the government scrutiny showed that most Chinese online marketplaces were bypassing Indian taxes by claiming these purchases were “gifts” which are not taxable as per domestic rules.―Times Now

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