Sino India Etail, an importer for Chinese apparel and lifestyle brand Shein, has withdrawn a petition that had challenged the seizure of hundreds of its packages and the sealing of its warehouse in Mumbai by the Customs department.
The company withdrew the writ petition filed in the Bombay High Court against the Office of the Commissioner of Customs – II, a court order dated January 8, which ET has reviewed, showed.
“They’ve withdrawn the petition after the bench did not grant them (Sino India Etail) provisional release of their inventory which they were seeking,” said a senior customs official on the condition of anonymity.
“It’s a big win for us and validates our case that they were evading duties,” the official added.
Sino India Etail did not respond to ET’s detailed email till the time of going to press.
Sino India Etail was charged by the Mumbai customs department for mis-declaring goods dispatched to consumers in India as B2B transactions and undervaluing the contents of the packages by as much as three to four times.
The Mumbai Customs’ action against Sino India Etail was part of a larger crackdown on around a dozen such importers on record who were working on behalf of overseas e-commerce websites.
ET reported in June about the action taken against Sino India Etail along with Globemax Commerce India, which is a unit of Chinese e-tailer Club Factory.
The Customs department’s investigation, documents of which ET had examined, revealed that Sino India Etail was acting as an intermediary between Zeotop Business Co, the owner of Shein, and customers in India, to avoid paying the full 42.08% duty on personal imports from abroad.
The parcels, which were forwarded by Hong Kong firm JNE Co to Sino India Etail, were seen to contain individual packages destined for end consumers.
The Indian firm would receive these parcels, split them up into their constituent packages, print the invoices containing addresses and ship them to end-consumers. This allowed Shein, like many other Chinese e-commerce players, to sell products to customers in India at rates lower than local competitors.
The issue has been flagged by local e-commerce vendor association AIOVA, communities such as LocalCircles and the RSS economic wing Swadeshi JagranManch.
Senior customs officials told ET that this model — of employing importers on record by Chinese e-commerce vendors — was becoming more prevalent after India scrapped duty-free gift imports in December, which was being misused earlier.
However, apart from at the Mumbai express courier terminal, action against such entities has not been proactive.
“They’re obviously using other ports (apart from Mumbai) to bring products in because we see that it is business as usual for them,” said an official. “The issue is that only the courier terminals at Mumbai, Bengaluru and Delhi are digitised. The rest, including the postal system, is still paper-based.”
The official explained that because of the paper-based system that was still prevalent in processing bills of entry and other documents related to imports, processing imports through the Customs department’s threat assessment system was not possible.
ET reported earlier that the Central Board of Indirect Taxes and Customs (CBIC) last year began seeking suggestions on how to tackle the issue, but so far, no action has been taken.
“The need of the hour is to enforce the no duty-free gift policy of DGFT, plug gaps at post offices and non-automated custom ports and migrate towards a pre-paid system for cross-border ecommerce shipments,” said SachinTaparia, founder and chairman of LocalCircles, which has been working on crowdsourcing solutions for duty evasion in cross-border e-commerce trade.
Leave a Reply