Chinese Ecommerce violation of gift rules
Swadeshi Jagran Manch raises concern over Chinese ecommerce apps bypassing laws, duties
NEW DELHI: The Rashtriya Swayamsevak Sangh’s (RSS) economic wing — Swadeshi Jagran Manch (SJM) is set to train its guns on the thriving new market of Chinese e-commerce apps. The SJM’s internal research team is learnt to have assessed that Chinese ecommerce firms currently bag over two lakh orders per day from Indian shoppers and are delivering goods via couriers and postal gift shipments, bypassing and evading a range of Indian laws on payment gateways, custom duties and GST, thereby disrupting the micro, small and medium enterprises (MSME) trade market in India.
ET has learnt that SJM is set to demand that all product shipments from China to India be channelised through the customs route and till then all postal gift shipments from China be stopped, download of non-GST compliant and unregistered Chinese e-commerce apps be banned and payment gateways be shut to them. The RSS affiliate has already red flagged the issue to the Ministry of Commerce and is now preparing to take it to the Prime Minister. ET gathers that the government is considering acting on the issue.
“We have talked to authorities in the commerce ministry on the issue and they are sympathetic to it. We feel that this issue, however, requires a concerted government effort to check the situation and so we will take it up with the PMO and the Reserve Bank of India (RBI) as well as the finance ministry,” Ashwani Mahajan, national co-convenor of SJM, told ET.
SJM argues that the China-based ecommerce sites or sellers like Shein, AliExpress and Club Factory among others, are misusing a clause in India’s Foreign Trade (Development and Regulation) Act, which exempts gifts of up to Rs 5,000 — received from abroad by persons living in India — from customs and other duties. The exemption was mainly aimed at low-value gifts sent by NRIs to families back home. Customs duties apart, no GST is being levied on these sales, and there are indications that identities of Indian NRI workers employed in the Middle-East are being misused in some of these gift shipments, SJM said.
It also pointed out that China Post appears to be heavily subsidising packages and delivery cost of products shipped to India to promote its own small industry which is targeting India’s younger population via social media. Since the ecommerce sites selling these products are not registered as business entities in India, there are no easy processes for grievance redressal and returns, and hence the risk of ‘hazardous, prohibited, unsafe or substandard goods arriving in India’ also looms large, SJM said.
ET gathers that SJM would demand mandatory registration of e-commerce sites and apps, MRPs and invoices for all their products and higher diligence by India Post including thresholds of shipment booking system to ensure that the FT (D&R) Act is not misused. It would also suggest an integrated system that connects customs, RBI and India Post to track imports better. SJM has also relied on a LocalCircles survey on the issue.
“While the scale of orders to these apps was about a lakh in August or so as per customer feedback, it has now risen to over two lakh per day. There are serious concerns over the impact on India’s MSME sector as it is an uneven playing field, with the Chinese apps evading rulebooks and duties. We also flagged off the issue to the government,” Sachin Taparia, CEO, LocalCircles, told ET.
https://economictimes.indiatimes.com/industry/services/retail/swadeshi-jagran-manch-raises-concern-over-chinese-ecommerce-apps-bypassing-laws-duties/articleshow/66947421.cms
Add new comment
to top
more
NEW DELHI: The Rashtriya Swayamsevak Sangh’s (RSS) economic wing — Swadeshi Jagran Manch (SJM) is set to train its guns on the thriving new market of Chinese e-commerce apps. The SJM’s internal research team is learnt to have assessed that Chinese ecommerce firms currently bag over two lakh orders per day from Indian shoppers and are delivering goods via couriers and postal gift shipments, bypassing and evading a range of Indian laws on payment gateways, custom duties and GST, thereby disrupting the micro, small and medium enterprises (MSME) trade market in India.
ET has learnt that SJM is set to demand that all product shipments from China to India be channelised through the customs route and till then all postal gift shipments from China be stopped, download of non-GST compliant and unregistered Chinese e-commerce apps be banned and payment gateways be shut to them. The RSS affiliate has already red flagged the issue to the Ministry of Commerce and is now preparing to take it to the Prime Minister. ET gathers that the government is considering acting on the issue.
“We have talked to authorities in the commerce ministry on the issue and they are sympathetic to it. We feel that this issue, however, requires a concerted government effort to check the situation and so we will take it up with the PMO and the Reserve Bank of India (RBI) as well as the finance ministry,” Ashwani Mahajan, national co-convenor of SJM, told ET.
SJM argues that the China-based ecommerce sites or sellers like Shein, AliExpress and Club Factory among others, are misusing a clause in India’s Foreign Trade (Development and Regulation) Act, which exempts gifts of up to Rs 5,000 — received from abroad by persons living in India — from customs and other duties. The exemption was mainly aimed at low-value gifts sent by NRIs to families back home. Customs duties apart, no GST is being levied on these sales, and there are indications that identities of Indian NRI workers employed in the Middle-East are being misused in some of these gift shipments, SJM said.
It also pointed out that China Post appears to be heavily subsidising packages and delivery cost of products shipped to India to promote its own small industry which is targeting India’s younger population via social media. Since the ecommerce sites selling these products are not registered as business entities in India, there are no easy processes for grievance redressal and returns, and hence the risk of ‘hazardous, prohibited, unsafe or substandard goods arriving in India’ also looms large, SJM said.
ET gathers that SJM would demand mandatory registration of e-commerce sites and apps, MRPs and invoices for all their products and higher diligence by India Post including thresholds of shipment booking system to ensure that the FT (D&R) Act is not misused. It would also suggest an integrated system that connects customs, RBI and India Post to track imports better. SJM has also relied on a LocalCircles survey on the issue.
“While the scale of orders to these apps was about a lakh in August or so as per customer feedback, it has now risen to over two lakh per day. There are serious concerns over the impact on India’s MSME sector as it is an uneven playing field, with the Chinese apps evading rulebooks and duties. We also flagged off the issue to the government,” Sachin Taparia, CEO, LocalCircles, told ET.
https://economictimes.indiatimes.com/industry/services/retail/swadeshi-jagran-manch-raises-concern-over-chinese-ecommerce-apps-bypassing-laws-duties/articleshow/66947421.cms
Add new comment
to top
more
Viewed by 1345
View all 7 comments Below 7 comments
I feel some process, of import/supply for overseas e-com deliveries can resolve this problem. a. In the import documentations - mode of payment to be confirmed ( Cash paid in advance, banking channels, cash on delivery or credit/debit card etc... b. All imports incl. samples, gifts are coming thru Postal customs or Customs for courier imports... There checking and process can be stream lined to see, if the import is genuine ( from a relative or friend) or a commercial supplier. All applicable taxes to be charged for commercial imports, irrespective of payments. c. Imports thru courier is being charged for customs duty, since the import manifest by courier company is a consolidated one and the value generally exceeds Rs.5000 ( This is my personal experience on FedEx, DHL even when we get genuine samples, or literature for normal export/import trade) d. Also since the import stat can easily compile source and item HS code, the deviations can quickly be noticed in 2-3 months time max and specific corrective actions can be done. What is most important is genuine efforts even within existing rules to a great extent can reduce this malpractices happening in or thru the e-com channel Rgds, more
Jan 07
I strongly feel SJM is doing good job. All Indian who are importing from China are mostly smuggling Chinese goods and evading duties. Imagine amount duty being evaded. Government does not seems to be serious on this issue. Product Honeycomb Cooling pads for Air coolers we are manufacturing is being imported from China at half the price. Many Indians have opened their offices in China to transfer cash payment to Chinese exporters. All these transactions are dome in cash. It seems demonetization has not made in impact on cash transactions. I feel the Government should have should have some system to receive the complaints against such illegal import and take immediate action. more
Jan 06
Friends in the name of Globalisation and open economy related to all such sectors we cannot stop ,just by laws. We have to first inculcate the spirit of My country first. Other countries have progressed on the spirit of their country first. This is not simply ideological talks but it is fact. If we don't promote such practices ,either by business people n their clientele no country can push their products in our country. Why our traders cannot reduce their fat machines or to that extent the manufacturers? Because Chinese products are cheaper any one is tempted to buy it so a is the seller. To protect our integrity n national interest first, we all have to wake up, shrugoff the mentality of MUZE KYA let govt do it. It has nothing to do with any party or organization. more
Jan 06
The SJM (I don't see this issue as promoting SJM or RSS in any way), has got a perfectly valid point. Let us not be asleep when India is being cheated of employment, business opportunities, and tax revenue. I hope the Government takes action, just as it has on foreign owned E Commerce companies who are trying to drive their competitors, including Indian ones, out of business by offering ridiculous discounts. more
Jan 06
