Courier terminals at Bengaluru and Delhi have stopped clearing parcels being shipped through the ‘gift’ route, roughly six months after Mumbai Customs took similar action, stopping the flow of e-commerce shipments from Southeast Asia and China which were being wrongly declared as ‘gifts’ to evade duties. India currently allows individuals to receive free samples and gifts up to Rs 5,000 in value via courier without paying any duties. There is, however, no cap on the number of gifts an individual can receive, which overseas e-commerce vendors have exploited. Parcels under the CB-12 (gift and samples) route have been stopped at Mumbai, Bengaluru, and Delhi, while the customs port at Chennai is also considering similar action, senior customs officials confirmed to ET. Apart from these four courier ports, the Kochi and Kolkata airports also receive a large number of packages through the ‘gift’ route. “No parcels being declared as gifts are getting cleared. This action has dissuaded most shippers and we’re now receiving very few shipments as gifts,” said a senior customs official at the Delhi courier terminal. “Similar action has been carried out at Mumbai and Bengaluru, but this is limited only to CB-12 gift and samples shipments.”
The move comes at a time when the Central Board of Indirect Taxes and Customs (CBIC) is considering amending the CB-12 rule to cap the number of gifts an individual can receive from abroad. The change, which was expected in the Union budget earlier this month, is yet to be made. The revenue department is considering a bigger amendment to the customs laws, said another source who consults with various ministries. Customs officials also confirmed that the CBIC had sought their recommendations on how to curb e-commerce imports that were evading levies through the CB-12 and CB-13 route. With the crackdown on imports through the gift route, overseas retailers have been increasingly misusing the CB-13 low-value imports route.
Foreign e-commerce firms have been contracting local companies and setting up local units, which import e-commerce items destined for consumers in bulk, passing them off as B2B shipments. “We’ve recommended a flat import duty rate for couriers, similar to what air passengers have today. But this will require a change in the law and will take significant political will to fix,” said a customs official at the Mumbai port. “If the rates are standardized, then we have to worry only about the valuations of items, which is still a big task, but will make our job a lot easier.”