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What is the Difference Between Duty-Free and Duty-Paid Products?

Understanding the Terms ‘Duty, Duty-Free and Duty-Paid'

What is the Difference Between Duty-Free and Duty-Paid?

We’ve explained the difference between duty-free and duty-paid in the table below:

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 edible to remember your trip.

While you enjoy shopping at the international airports, remember that travel insurance can be crucial for you. It covers your luggage in case of loss, theft, or damage during your transit at the airport and medical emergencies.

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.

FAQs about Duty-Free and Duty-Paid