A New Amendment to India's Foreign Tax Policy 2015-20
- Until today, goods imported as gifts & sample of value under Rs.5000 was exempted from custom duty, including those which was purchased from e-commerce portals.
- Since there was no limit on the number of gifts an Individual can receive, many Chinese companies were reportedly under billing (under Rs.5000) items to get them pass through the Indian Customs without payment of import duty.
- To restrict tax evasion by such companies, Indian Government has amended the Foreign Trade Policy 15-20 and state that Import of Goods as gift is allowed only after payment of full applicable duties.
- However, the above amendment would NOT apply on 'Rakhi'. Thus, Rakhis (but not gift related with it), will still be allowed under section 25(6) of the Customs Act 1962.
- This new regulation will apply to all E-commerce companies.
- This move is to restrict the tax evasive practices of Chinese e-commerce platforms like Shein, Club Factory etc.
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