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Report: Alibaba to penalize tax-evading merchants in India

Alibaba Group Holding Ltd. plans to take steps against sellers on its online platform AliExpress Ltd. in India who are practicing illegal activities to avoid paying taxes, TNN reported Jan. 7, citing an Alibaba spokesperson.

The spokesperson reportedly said AliExpress "has strict measures in place to take action against items that contain descriptions that encourage tax avoidance." The report added that merchants who violate the rule face penalties like store closure.

The report comes less than a month after the newspaper reported that a large number of products from China are entering India, masked as gifts, and shipped directly to customers. Mint reported Jan. 4 that the Mumbai Customs office had ordered to check "misdeclaration and smuggling of goods imported through couriers."

Under local laws, gifts of up to 5,000 Indian rupees from Indians living abroad are exempt from taxes.

The news comes as the Indian government prepares to impose new regulations on e-commerce companies beginning Feb. 1.

As of Jan. 7, US$1 was equivalent to 69.81 Indian rupees.