In a bid to stem e-commerce shipments from Southeast Asia and China which are wrongly declared as ‘gifts’ to evade duties, courier terminals at Bengaluru and Delhi have stopped clearing parcels under the CB-12 (gifts and samples) route, according to an Economic Times report. Mumbai Customs took a similar action in January 2019, while Chennai is considering it.

What is the CB-12 rule?

Individuals can receive free samples and gifts up to ₹5,000 in value without paying any duties

No cap on the number of gifts individual can receive; exploited by overseas e-commerce vendors

Problem with the rule

E-commerce platforms based in China, such as Club Factory, Shein and AliExpress, misuse this rule to ship cheaper products to Indian customers as gifts, thus avoiding customs duty, and goods and services tax , LiveMint had earlier reported.

, LiveMint had earlier reported. Under a World Trade Organization moratorium, electronic transfer of services, such as e-books don’t require imposition of customs, but physical transfer of goods bought on e-commerce platforms are taxable.

Stopping ‘gifts’ form China halves courier shipments at the Mumbai airport

In the four months since Mumbai airport stopped the inflow of such ‘gifts’, courier shipments halved at the Mumbai airport , the Economic Times reported in April.

, the Economic Times reported in April. However, Chinese etailers had started shipping to other Indian ports.

In July 2019, Chinese e-commerce Shein platform shut down partially and started refunding money to consumers because of crackdown by Mumbai Customs, ET reported.

and started refunding money to consumers because of crackdown by Mumbai Customs, ET reported. Companies like AliExpress on-boarded third party Indian sellers on their platform to be compliant, ET reported.

on their platform to be compliant, ET reported. Letter dated December 28, 2018 from Office of the Commissioner of Customs for the Mumbai jurisdiction directed customs officers at the Mumbai airport to not grant clearances to such shipments.

Amendment to CB-12 under consideration