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How to differentiate between DAP and DDU under Inco terms?
One of the most common doubts among terms of delivery under Inco Terms is about DDU Vs. DAP.
Is there any difference between DDU and DAP terms? What is DAP terms? How does DDU term work? How to differentiate DAP with DDU? A confusion on terms of delivery DDU and DAP may arise among some of the traders in business industry.
DDU and DAP terms are two of delivery terms used in business, especially in international trade. Let us discuss about DDU terms. How does DDU term work?
DDU term has been being used under International Commercial Terms 2000 guided line by International Chamber of Commerce. DDU means, Delivered Duty Unpaid (followed by a destination name). For example, DDU Bangalore means, the seller needs to deliver goods to the buyer up to the destination (Bangalore) mentioned in contract. Bangalore is a place in India about 350 kilo meters away from Chennai Sea port. Under DDU terms, the seller’s obligation is to deliver goods to buyer up to Bangalore. As mentioned under DDU terms, the duty and taxes at importing country has to be met by the buyer (importer). All other expenses of carriage, insurance, customs clearance, and other expenses up to the place (Bangalore) need to be spent by the seller of goods. You can also read DDU terms in details in this website.
When revising the terms of delivery in Inco Terms 2010, the said DDU terms has been omitted and introduced a new term called DAP.
What is DAP terms?
DAP means Delivered At Place (followed with a destination name). For example DAP Bangalore. DAP Bangalore means, all responsibilities with costs except duty and taxes and customs clearance at importing country to deliver goods to buyer at the destination place (‘Bangalore’ in this example) is vested with the seller. Means, under DAP terms, the responsibility to meet customs clearance with duty and taxes at importing country is with the buyer.
In a nutshell, DDU has been omitted in Inco terms 2010 by introducing DAP terms by covering almost all functions of DDU. Although the term DDU has been omitted in Inco terms 2010, the said DDU term can be used under delivery terms in business transactions. However, the traders need to mention the delivery terms in sale contract as ‘as per Inco terms 2000’ in such business contract document. (Thanks to Jaanaka who helped to correct an error in this article on 10th March,2014)
I hope, I could clarify the difference between DAP and DDU.
Detailed articles about Inco Terms of Delivery under export and import of International business have been mentioned in separate category – INCO TERMS – in this web site. You can click here to read.
Do you have different thoughts on DDU and DAP?
Discuss below your experience and thoughts on DAP Vs. DDU.
The above information is a part of Import Export online Training
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