International Business

What Is Meant By Delivery Duty Paid – DDP Incoterms

Delivery Duty Paid (…named place of destination). Delivered Duty Paid [ DDP Incoterms ] means that the seller delivers the goods to the buyer, cleared for import, and not unloaded from the arriving means of transport at the named place of destination. The seller has to bear all the costs and risks involved in bringing the goods thereto including, where any ‘duty’ (which term includes the responsibility for and the of the carrying out of customs formalities and the payment of customs duties, taxes and other charges) for import in the country of destination. (Incoterms 2010)

While the incoterm Ex-Works or EXW signifies the seller’s minimum obligation, the term Delivered Duty Paid [ DDP Incoterms ], when followed by words naming the buyer’s premises, denotes the other extreme – the seller’s maximum obligation.

The seller has to do all that is necessary to place the goods at the premises of the buyer. He has to prepare the goods, pack them, arrange for their transportation, comply with the export and import formalities, arrange for the internal transport in the buyer’s country and ultimately place the goods at premises of the buyer. Till that time the risk in the goods also rests with the seller.

If the buyer has indicated a place other than his premises as the destination for the goods, the seller should provide the buyer with a customary document of transport warehouse, warrant, dock warrant, delivery order or the like, as the case may be, to enable the buyer to take delivery of the goods. The seller retains the risks of the goods till they reach such destination.

Under Delivered Duty Paid [ DDP Incoterms ], the seller should reimburse the buyer for any assistance rendered by the buyer in getting import license, etc. The buyer’s only duty is to take delivery of the goods at the destination. If the parties wish that the seller should clear the goods for import but that some of the costs payable upon the import of the goods should be excluded—such as value added tax (VAT) and/or other similar taxes—this should be made clear by adding words to this effect in the contract of sale.

Documents required under Delivered Duty Paid [ DDP Incoterms ] contracts are as follows:

(a) Document of transport, if required,

(b) Invoice, and

(c) Other documents if required by the buyer.

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