Buffer time given on taxing imported goods sold online

E-commerce companies have been given a one-year buffer period to rethink their cross-border strategies, after the government released new regulations, which ease controlsintroduced in April on certain imported goods sold online.

The country's customs authority said it will continue to allow the direct import of cosmetics,baby formula, medical equipment and healthcare-related food in 10 pilot cities, withoutpermission, or the filing of special applications.

Companies have been told they have until May 11, 2017 to bring imported goods into bondedwarehouses in the cities－including Shanghai, Hangzhou, Ningbo, Zhengzhou, Guangzhouand Shenzhen－without having to complete customs clearance forms originally required fromearly April on cross-border e-commerce activities.

Customs officials were unavailable to comment on the latest move on Wednesday, butBeijing-based JD.com Inc and another major e-commerce platform, which asked not to benamed, both confirmed they had received the reprieve notice.

Lu Zhenwang, an e-commerce expert and chief executive officer of Shanghai-based WanqingConsultancy, said the April regulation required e-commerce companies to obtain certificatesfirst in order to get their goods through customs, but that had already led to a fall in importvolumes.

"Many companies have faced challenges in maintaining stock levels because of the difficultyin completing all the customs-related paperwork," he said.

But the new regulation now gives them effectively a one-year window to rethink theirprocedures and plan well ahead, said Lu.

China started levying taxes immediately on retail sales on cross-border e-commerceplatforms in early April, as well as placing stricter regulations on gaining import permits forgoods sold online.

The aim was to create a more level-playing field, said officials, for e-commerce platforms andtraditional retailers and importers.

The regulations, however, triggered mixed reactions among buyers and sellers, with manysimply expecting prices of imported goods sold online to be driven higher, resulting in a fall insales.

Gao Hongbin, head of AliResearch, a think tank affiliated with Alibaba Group Holding Ltd,said cross-border e-commerce is not a realistic competitor to traditional importers.

(CHINA DAILY)