After the government’s clampdown on Chinese e-commerce companies and sellers who were allegedly sending goods to India as gifts to evade duty, some Chinese firms are now circumventing the current set of laws by undervaluing the products being sold to Indian consumers on their invoices.
The companies are recording as much as 50% less pricing on the final invoice compared to the listing on the online platforms, according to a senior excise official in Mumbai.
Courier Bill of Entry, commonly known as CBE-13, which allows import of goods valued up to Rs 1 lakh, is being used by the companies to evade duties since the invoices show reduced price. Essentially, the reduced prices would eventually show lower duties that need to be paid on these products.
Sellers on e-commerce websites like Club Factory, Shein or AliExpress have been exploiting regulatory loopholes that resulted in homegrown traders complaining about the issue to the government last year.
“We have tracked a bunch of shipments coming from Chinese e-commerce companies and found the invoice price records are significantly lower than the actual price of the product on their platform. The idea is to value it as low as possible so that you pay minimum duties and they can leverage their pricing accordingly.” – Senior Excise Official
Other key entry points of such commercial goods entering India have been alerted as well.
“AliExpress is a marketplace and forbids illegal activities by third-party online sellers on its platform. Globally, AliExpress has strict measures in place to take action against sellers that violate any local laws of the countries in which it operates.” – AliExpress Spokesperson
The entities immediately affected by such practices are the local retailers who feel there is no level playing field and have been raising their concerns with the government.
