Govt prohibits gift imports through ecommerce portals

Govt prohibits gift imports through ecommerce portals
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In a clampdown on goods coming through e-commerce portals using the “gift” route, the government on Thursday prohibited such imports except life saving drugs and rakhi. The import of gifts was earlier free and not subject to customs duty.

The move will impact Chinese e-commerce websites like Club Factory, Ali Express and Shein who are the largest users of this route.

“Import of goods as gifts with payment of full applicable duties is allowed,” DGFT said in a notification on Thursday.

The government was concerned over a large number of products from China entering India as ‘gifts’ and being shipped directly to customers since gifts of up to Rs 5,000 intended for personal use are exempt from customs duties. Moreover, this was hurting the Make in India ambition as New Delhi’s trade deficit with Beijing in 2018-19 was a whopping $53.6 billion.

ET had reported last year in December that the Department for Promotion of Industry and Internal Trade (then called department of industrial policy and promotion) wanted to impose restrictions on such online purchases of “gifts” from Chinese etailers and apps.
The Indian industry had complained to the government that Chinese etailers are taking undue advantage of the exemption from customs duties on gifts of up to Rs 5,000. Moreover, Chinese etailers, unlike their counterparts from other countries, do not ask customers for any government-issued identity proofs to complete the transaction, making it difficult to track such transactions.
As per the notification, import of goods including those purchased from e-commerce portals through post or courier where customs clearance is sought as gifts, is prohibited except for life saving drugs/medicines and Rakhi (but not gifts related to Rakhi).

“Earlier, there was no duty on such gifts and Chinese websites were misusing this gift arbitrage the most. Now they will have to pay customs duty,” said an expert.
In case of rakhi, no duty will be collected if the amount of duty leviable is equal to or less than Rs 100.