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Whenever you travel abroad and visit the airport, one of the most common and prominent facilities you are bound to find are duty-free stores. You will see a wide selection of products like liquor, cosmetics, perfumes, electronics and more that entice you to step in and shop.
In some airports and stores, you might also come across another section known as duty-paid. To get a better understanding of duty-free and duty-paid, read on.
‘Duty’ means tax. It is a payment levied on importing, exporting, manufacturing, or selling goods.
Items like alcohol, perfumes, designer fashion and accessories, cosmetics, tobacco and electronic products are most affected by duty.
So, when consumers spend close to 6 lakhs on a Rolex, for example, they also pay a considerable amount as tax. To save on this tax, you can purchase items free of duty.
Duty-free means purchasing an item without paying import, sales, value-added, or other taxes. Retail businesses sell products exempt from duties and taxes with the understanding that they will be taken out of the country for use.
That is why you can find many duty-free stores at airports, seaports and other country entry and exit points.
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Duty-paid, on the other hand, are simply goods on which tax is already paid. You will find duty-paid stores at airports and seaports, but these products are also offered to domestic customers and are not limited to just international travellers.
|
Basis |
Duty-Free |
Duty-Paid |
|
Meaning |
Duty-free refers to items exempt from taxes or duties, typically those imposed by the country's government, where the goods are being sold. |
Duty-paid means that the taxes or duties that are applicable on a particular item have already been paid, either by the importer or the seller, before the item is sold to the consumer. |
|
Taxes Paid |
When a consumer purchases a duty-free item, they do not need to pay any taxes or duties on that item. |
The price of the item includes the taxes or duties, and the consumer does not need to pay any additional taxes or duties upon purchase. |
|
Location |
Duty-free items are usually purchased in designated duty-free shops, often found at international airports, seaports and border crossings. |
Duty-paid items are typically purchased in regular retail outlets, located anywhere within the country. |
|
Objective |
Duty-free stores are mainly set up for the purpose of encouraging tourism. |
Duty-paid stores are just like regular retail stores (like supermarkets) made available for purchase to the general public. |
|
Who Can Buy? |
Duty-free merchandise is sold only to departing international travellers. |
Anyone travelling anywhere can purchase duty-paid items. |
|
Range |
Only certain items with a limited selection are sold in the duty-free section. They are often high-end, globally branded products in high demand. |
Items sold in duty-paid sections are more locally made, widely available, with more variety and choice. |
|
Restrictions |
The items sold in the duty-free section are subject to local restrictions. They are intended for personal use and are often subject to quantity limits for each particular item. |
Duty paid items have higher prices due to included taxes but offer a wider range of options and quantities for each particular item without any purchase restrictions. |
|
Examples |
Alcohol, tobacco, cosmetics, fashion products, etc. |
Energy products, motor vehicles, petroleum products, alcohol, tobacco, etc. |
If you are interested in saving costs while purchasing high-end global products, you must step into duty-free stores at international airports to buy your favourite products. Duty-paid stores will also provide you with a better range of products to shop from as a perfect gift, souvenir or eatable to remember your trip by.
In this article, we have explained the meaning of duty, what is duty-free and duty-paid shopping and their differences. This will help you understand international shopping better while saving your money abroad.
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Disclaimer -
Your policy is subjected to terms and conditions mentioned in your policy schedule and policy wording. Please go through the documents carefully.
The information mentioned here about the countries, visa fees and others is taken from different sources. Digit Insurance is not promoting or recommending anything here. Please verify the same before you book your tickets, apply for a visa, buy a travel policy or make any other decision.
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