India cracks the whip on Chinese e-com sites for tax and custom duty evasion

(190125) -- DAVOS, Jan. 25, 2019 (Xinhua) -- Alibaba co-founder and chairman Jack Ma speaks at a report launch at the 2019 World Economic Forum (WEF) annual meeting in Davos, Switzerland, Jan. 24, 2019. The report on "Digital Technology and Inclusive Growth" was released by Luohan Academy, a research body of China's Alibaba Group, on the sidelines of the 2019 World Economic Forum (WEF) annual meeting in the Swiss ski resort of Davos on Thursday. (Xinhua/Xu Jinquan)

New Delhi:  The government has started cracking down on purchases made on Chinese e-commerce platforms which evaded goods and services tax and customs duty, sources said.

The IT and customs officials are already keeping an eye on such movements of goods and transactions and now post offices and other courier service providers would also monitor such dubious movements, sources said.

Recently, the government also made it mandatory for the Chinese e-commerce portals to register in India.

The Department for Promotion of Industry and Internal Trade (DPIIT) had written to all the ports across the country to keep a tab on the goods imported and check whether they actually are “gifts” as claimed by the online platforms.

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Gifts received by Indians from a foreign country worth up to Rs 5,000 do not attract any taxes. Market sources said the Chinese retailers such as Club Factory, AliExpress and Shein using the law to bypass mandated taxes.

Government sources said the such tax-evading purchases from Chinese online players amounted to 2 lakh orders, before steps taken by the authorities brought it down to 1.20 lakh units.

The Centre in the past few months has made several changes in the country’s e-commerce policies, and tried to provide a level-playing field to the Indian players, including changes in the FDI policy.