Before it amends Customs laws, the Central Board of Indirect Taxes and Customs (CBIC) is seeking public feedback on curbing duty and GST evasion allegedly by e-commerce companies located outside the country. The CBIC is looking for tech-enabled solutions to ensure duties are paid correctly and to make imports through express courier seamless, according to customs officials and others in the know of the matter The solution should help customers get deliveries faster and free up from red tape those courier services and overseas e-commerce firms that are willing to do business legally, an official said on the condition of anonymity. “We’re open to suggestions, including changing laws to introduce a flat rate of duty and GST for courier imports, but the system needs to be seamless,” said a senior Customs official.
The CBIC has asked community platform LocalCircles to collect the feedback. In fact, there were 340 comments from the public and other community members in response to a blog post by LocalCircles on the issue. The suggestions included mandatory registration of all overseas e-commerce entities in India and data capture at single source inside the CBIC. A flat rate on imports through express courier and disallowing overseas e-commerce transactions from being classified as B2B transactions through local partners were the other suggestions. The government has already sought suggestions internally on how to curb duty evasion, another senior Customs official told ET. A system to deduct customs duty and GST when consumers pay could be one solution to stop evasion, he said. The government has cracked down on e-commerce imports labeled as duty-free ‘gifts and samples’. It has blocked clearance of all such parcels at express courier ports in Mumbai, Delhi, and Bengaluru. After the move, these ports have seen a drastic reduction in the number of incoming gifts, but other ports continue to clear such gifts.
Other methods of duty evasion, too, have been flagged. In June, customs officials in Mumbai seized over 500 large consignments of Chinese e-commerce firm Shein and sealed a warehouse of its Indian reseller Sino India Etail for undervaluing goods imported through the low-value (under Rs 1 lakh) consignment route. Sino India Etail was just one of a dozen or so firms against which action had been taken. The company conforms to local laws and pays taxes correctly and on time, it said previously. Imports already make up around 7-8% of India’s overall e-commerce market by value and are growing faster than the overall market pace, an analyst tracking the e-commerce sector at one of the Big Four consulting firms said. Although Amazon.com is a sizeable player in e-commerce imports, a significant portion of such imports is by Chinese e-commerce firms that allegedly evade taxes and duties.