Duties and Taxes
How import duty and tax are calculated, who pays under DDP vs DDU, and how to estimate them.
Duties and taxes are charges the destination country applies on import — separate from, and in addition to, the courier's shipping charge. Understanding how they're calculated helps you avoid surprising your recipient with an unexpected bill.
Duty vs. tax — what's the difference
Customs duty is a charge based on the type of goods (via its HS/tariff classification) and its declared value, set by the importing country's trade policy. Import tax (often a VAT/GST-equivalent in many countries) is a separate consumption tax applied on top, calculated on the value plus duty in many jurisdictions. Together these make up the "landed cost" beyond the item's price and shipping charge.
Why this changed for US-bound shipments in 2025
Until mid-2025, shipments to the US valued under $800 could enter completely duty-free under the "de minimis" rule. That exemption was suspended for China and Hong Kong in May 2025, then extended to every country from 29 August 2025, and has been confirmed as continuing through 2026. This means duty now applies to every US-bound parcel from India regardless of its declared value — a cost that simply didn't exist for low-value shipments before. See Customs Information for Shipping to USA.
Who pays, and when
- DDP (Delivered Duty Paid): the shipper pays duty upfront as part of the shipping transaction; the recipient pays nothing extra on delivery.
- DDU/DAP (duty unpaid): the recipient pays duty directly, usually at or just before delivery. This is where an unprepared recipient can cause a delivery to stall or be refused.
How to estimate duty before you ship
Duty rates vary by product category and destination country — there's no single number that applies universally. If you ship the same product to the same country repeatedly, note the duty rate you're charged for future reference; for a first-time or unfamiliar shipment, check the destination country's current tariff schedule for that product's HS code, or ask your courier's customs desk for guidance specific to that route.
Practical steps to avoid duty-related delivery failures
- Decide upfront whether you'll offer DDP — for ecommerce sellers, this materially improves the customer experience post-2025
- If shipping DDU, tell the recipient in advance that a duty payment may be required on delivery
- Declare an accurate value — under-declaring to reduce duty is a compliance risk, and customs can reassess based on the actual goods regardless of what's declared
- Build the likely duty cost into your pricing if you ship internationally regularly, rather than treating it as an occasional surprise
Frequently asked questions
What is the difference between duty and import tax?
Duty is charged based on the goods' classification and value, set by the importing country's trade policy. Import tax is a separate consumption tax often applied on top, in many jurisdictions calculated on value plus duty.
What is the difference between DDP and DDU shipping?
Under DDP (Delivered Duty Paid), the shipper pays duty upfront and the recipient pays nothing extra. Under DDU (duty unpaid), the recipient pays duty directly, usually at or before delivery.
Why does every shipment to the USA now include duty?
The $800 de-minimis exemption was suspended for all countries from 29 August 2025, so every US-bound parcel is now formally assessed for duty regardless of declared value.
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