India’s Crackdown On Chinese E-commerce Platforms

Apr 09, 2019 By Admin

In another major move in the E-commerce Industry, the Government of India has started a major crackdown against the Chinese E-commerce platforms for flouting Indian Laws and Taxation. Foreign E-commerce platforms have been under the radar of Indian Government lately after many Indian E-commerce players have complained of unequal playing field.

This year came with strict E-commerce policies rolled out by the Indian Government to curb the unethical business practices adopted by the foreign E-commerce players. The move comes as a shocker for leading e-commerce companies like Amazon & Flipkart, which are famous for offering lucrative deals, and deep discounts to attract buyers.

The revised policy will come into effect from February 2019 and aims at protecting the interests of domestic marketplaces and retailers, which have seen consumers, move away due to the deep discounting strategy by bigger E-commerce players.

After sending direct orders to the tax and customs officers, the government is now asking the post office and courier companies to monitor shipments from China. The government had earlier restricted the import of such goods from the Mumbai port but has now put a strict vigil on other big ports like Chennai and Kolkata.

It is alleged that the Chinese retailers such as were taking undue advantage of the exemption from customs duties on gifts of up to Rs 5,000. According to the government investigations most of the Chinese ecommerce platforms were circumventing Indian tax regimen by claiming these purchases were “gifts” which are not taxable as per domestic laws.

It has also been noted that these Chinese E-commerce platforms didn’t pay IGST & Customs Duty on goods being exported by them to India thus making their products a lot cheaper compared to similar products in India. The price difference in some cases rose as high as 40%. Further not giving invoice to avoid tracking has also been the modus operandi.

The government has now made mandatory for these Chinese e-commerce companies to get registered in India and has put strict vigil on big ports to keep a check on Chinese goods being disguised as gifts and not products delivered.

Published by : RAKESH KANWAR & CO.
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