This provision in the Exim Policy was being exploited by a group of traders in India and a few Chinese e-commerce sites.

Government scraps e-commerce gifts to curb undervaluing of Chinese imports
Atom E-commerce Sunday, December 15, 2019 - 08:13

As reported earlier, the government has gone ahead and taken the step to stop import of ‘gifts’ via courier and through post. This provision in the Exim Policy was being exploited by a group of traders in India and a few Chinese e-commerce sites. These traders would order products on these sites and arrange to have them couriered to them as ‘gifts’. As per the existing provision, such gift items valued up to ₹5,000 were exempt from Customs or Import Duty. The traders were found to be grossly misusing this provision and the Chinese companies were undervaluing the goods, escaping the payment of duty. This created a problem for the retail trade here who made complaints to stop this practice.

After several attempts to curb this, the government has now issued a notification amending the policy and scrapping this free gift provision. If any such parcel is received, Customs will not clear the goods and it will be sent back. The Directorate General of Foreign Trade (DGFT) has issued the relevant notification, which inter alia states: “Import of goods, including those purchased from e-commerce portals, through post or courier, where Customs clearance is sought as gifts, is prohibited”.

It has however been clarified that such parcels received as gifts can be cleared on payment of duty. The Foreign Trade Policy 2015-2020 stands amended accordingly.

The DGFT has also clarified that this ban will not affect the import of life-saving drugs through courier. The other exception granted is for Rakhis, a wrist band women tie on the wrists of their brothers during the occasion of Raksha Bandhan.

Though the formal announcement has come only now, Customs officials at most ports had stopped clearing such parcels for the past few months already.

Those engaged in evading duty have possibly found other loopholes in the system to clear their goods and the government is working on plugging those as well.

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