E-Commerce Centers: The Trade Department works with the Revenue Department to solve the issue of duty-free returns

With the expansion of e-commerce hubs to facilitate online exports likely to feature prominently on the government’s 100-day agenda, the Commerce Department is working with the Treasury Department on complex issues such as a proposal to allow returns without imposing import duties and sources say to speed up customs clearance.

“The Department of Commerce is in discussions with the Department of Treasury about support that should be extended to e-commerce entities to speed up export clearance and help re-import rejected products. “The implementation of the e-commerce hub policy may also be announced in the Union Budget if the issues are resolved between both the parties,” the source said.

E-commerce hubs are expected to act as key facilitators of export clearance, offering a wide range of services including warehousing, customs clearance, returns processing, labeling, testing and repackaging, according to the government.

“It is important to sort out the issue of reject imports because about 25 percent of e-commerce sales are refunded. These imports must be duty-free. The problem, however, is how these elements can be identified. “Identification is a difficult task,” the source said.

One way to address this issue could be to introduce tariffs on e-commerce exports. “There are options being considered by both the Department of Commerce and the Department of Treasury. Let’s hope everything will be sorted out soon,” the source added.

The broader goal is to ensure that returns of goods are not subject to detailed scrutiny and, in particular, returns of low-value and frequent goods do not cause problems, the source added.

DGFT is focusing on promoting e-commerce exports from India as the sector holds a lot of promise. India’s annual e-commerce exports are estimated at around $2 billion, while global e-commerce is estimated at $800 billion.

The DGFT is also working with the postal department and the RBI on various measures that can be taken to facilitate the operations of e-commerce entities.