DDU or DDP?

21-Jun-2010 DDU or DDP?

We are seeing more and more requests for DDP shipments into Australia recently, which has caused this article. Firstly, what is DDP or DDU?

Simply, DDP is Delivered and Duty Paid to the consignee and DDU is Delivered and Duty Unpaid.

In each instance, all charges from point of origin to door destination are paid by the shipper, the only difference being that Duties and taxes are either included in the prepaid amount (DDP), or those charges are to the account of the consignee ( DDU)

The problem with DDP is that as GST, or VAT, of 10% is applied to the CIF value plus Duty of the goods, and the shipper is paying this, the shipper has no recourse of claiming this back from the Australian Government (unless they own an Australian Entity registered for GST). Therefore the consignee/buyer is paying an inflated landed cost for their goods which in a competitive market, is not a great idea at all. A note to Australian Importers, you can delay the payment of GST by one month if you are on a monthly BAS Statement basis. Check with your accountant if this is suitable for your business. For further information on INCOTERMS (DDU, DDP, CIF etc., refer to our website : http://www.bluefreight.com/incoterms . More information sourced by Warren Worswick, Bluefreight Partner and Senior Broker from Australian Customs in a semi-legal jargon can be viewed here.



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