In accordance with Trade Policy 2015-2020, the provisions of which have been extended until March 31 this year, the importation of gifts was free of charge in the case of goods which are otherwise freely importable under trade classification standards. outside India. Any other imports required authorization from the General Directorate of Foreign Trade (DGFT). | Photo credit: VM MANINATHAN

It may become easier to receive Rakhis and life-saving drugs as gifts from relatives or friends abroad, under India’s new Foreign Trade Policy (FTP), even though it has tightened provisions for other gifts from abroad, including those purchased in global e-commerce. portals.

In accordance with Trade Policy 2015-2020, the provisions of which have been extended until March 31 this year, the importation of gifts was free of charge in the case of goods which are otherwise freely importable under trade classification standards. outside India. Any other imports required authorization from the General Directorate of Foreign Trade (DGFT).

Under the new FTP effective this month, “the importation of goods, including those purchased from e-commerce portals, by post or courier, where customs clearance is requested as gifts, is prohibited , excluding medicine/vital medicine and Rakhi (but not Rakhi-related gifts).

“Importation of goods as gifts with payment of full applicable duties is permitted,” the new policy reads. Rakhis as gifts will not incur any customs duty for cases where the corresponding levy is ₹100 or less.

“In the past, ‘gifts’ were misused in a few cases, to import goods without any payment of duties, resulting in leakage and lower collection of customs duties,” said the director of RSM India, Siddharth Surana. The Hindu, explaining the rationale seek to tax all imports as gifts except Rakhis and life-saving medicines.

However, the policy does not define “life-saving drugs,” so more clarity may be needed, Surana said. “The other relevant aspect is that there doesn’t seem to be a monetary limit for the gift and there would be an incidence of customs duties on gifts regardless of the amount. We think it would be imperative to set a threshold (say ₹50,000 per importer per year) and we expect the government to do so,” he stressed.