E-Commerce

Alibaba supports Indian customs officials’ decision of evasion of customs duty

Alibaba is China’s biggest e-commerce website. It was founded in 1999 by Jack Ma who is now an inspiration in China. Alibaba is an online marketplace for everyone. It is a consumer-consumer, business-business, and business-consumers online retail marketplace. It is one of a kind and allows every kind of businessman to do business via its web-portals. Apart from this, Alibaba has a lot of other business which ranges from shopping search engines to cloud computing.

Alibaba is valued at a staggering $231 billion. The market cap of Alibaba is $352 billion. It is one of the top ten companies in the world when it comes to valuation. Alibaba in January of 2019 became the second Asian company to break into $500 billion club. Alibaba is ranked as the company having 9th highest global brand value. That said, Aliexpress is one of the websites which deals in cross-border commerce. The cross border deals take place with all the customs and excise duty in place.

However, there have been some sellers who have found loopholes and are using those to a great extent. They are packing their orders as gifts and are sending it to the consumers. This is a major loophole and the Indian authorities couldn’t do anything. There were websites such as Club Factory which used to get maximum out of these loopholes.

That said, the Indian government has imposed a rule which has put a cap on gifts that are being imported. The Indian customs official will now allow gifts worth INR 5000 ($71 approximately) or less per Aadhar card number. This will totally shut down the imposters and now the government can keep a track of such sellers and detain them. That said, even Alibaba came out and said that it respects the government’s decision and is now tracking down all the sellers which have done this previously.

There are some government authorities who even thought of imposing a total ban on such imports. The decision now is harsh enough although the loopholes exploited were harsher. In spite of that, the authorities such as the Department of Industrial Policy and Promotion (DIPP) had suggested limiting the imports to four things per person. This suggestion came after INR 5000 limit can be used for any of your Know-your-customer (KYC) contact. This is another loophole but will limit the imports by a huge number.

Alibaba is for this rule totally and has dared the sellers to export the goods illegally and if they do, they might face store closure. This avoiding of customs has turned into a huge headache for the customs officials and the Indian government agencies such as DIPP are still trying to turn the decision to four items per person.

– Unmesh Phule

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