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                                            WHAT IS DAP DAP is “Delivered at Place”. It can be used for any mode of transport where more than one mode of transport is used. DAP is the modification of an old incoterm and a new addition to the latest versions of incoterm. It replaces the outdated DDU incoterm which was Delivery Duty Unpaid. DAP means that the seller must make the goods available at a named place by the buyer. The location is chosen by the buyer under DAP. The seller in DAP is not responsible for unloading the goods from the carrier at the destination. The seller also does not need to pay for any cutom duties, tarrifs, VAT, taxes or any other costs that may apply during the delivery of the good to the named location. As the seller is not responsible for any of these the buyer gets the responsibilities for the risks that involves processing customs cle...

                                              WHAT IS CPT CPT stands for Carriage Paid To. Unlike FOB and FAS this incoterm can be used for various modes of transportation. Thus the CPT incoterm is versatile. Under this incoterm the seller is responsible for bringing the goods to the destination and payment of any cost related to international freight. In CPT the transfer of risk is done when the goods have been loaded on board to the means of transport. The terminal operator makes the Terminal Handling Charges. There are chances that these charges may not be included in the freight rates, in such a case the buyer should enquire beforehand that if the CPT includes these charges to avoid complications. The seller under CPT is responsible for the goods and their packaging and wrapping. The seller is also responsible for the documents required. He needs to get...

                                                WHAT IS CIF CIF is short form of “Cost, Insurance and Freight”. Like the CFR this incoterm is also exclusively used for shipping. Also like the CFR CIF is used for bulk goods and non containerised shipments. This indicates that the seller is responsible for the cost as well as the freight of the goods to the destination port which is decided by the buyer. In addition to all of this the seller must also provide insurance for the goods being transported. In CIF the risk transfer point is also different from other incoterms. The risk transfer point is not the same cost transfer point as is the case with other incoterms. Under CIF the risk is transferred when the goods get loaded on the ship at the origin of the shipment. The seller is obliged to give insurance to the goods and deliver the shipment and the docu...

                                          WHAT IS CFR CFR is “Cost and Freight”. This incoterm is only for the maritime shipping. In this incoterm the seller does not only delivers the goods to the buyer but he or she is also responsible for goods to be transported to the destination port and their transportation costs. It is commonly used where where the seller has direct access to the vessel for loading. For example bulk cargos and non containerised goods. The seller under CFR undertakes the responsibility of delivering the goods to the port mentioned in the contract, get a customs clearance from the origin and pays for the international freight. All the rules of the previously mentioned incoterms apply to CFR also. The seller however is not responsible for the insurance of the goods The insurance of the goods is a responsibility of the buyer. Other obligation...

                             DIFFERENT INCOTERMS IN SPECIFIC COUNTRIES Now we all have a basic idea of what incoterms are and how they help in the import and export of goods. Incoterms however do have exceptions. For instance, US is the only country that accepts a customs bond. A customs bond is charged by the US customs department and protects the US government in case the importer has not paid any penalties or taxes. If such a case comes up then the goods are withheld by the US customs department. Also when exporting goods from India, a withholding tax is to be paid. If the goods which are being exported is mentioned in the Second Schedule of Export Tariff, then no taxes are to be paid otherwise one should pay the withholding tax to get a clearance to export the goods. While we have discussed India and US briefly there is also a third country which has specific Incoterms relating to trade. The countr...

                                    INCOTERM WHAT ARE THEY Incoterms and intercoms may look as seemingly similar terms. There are chances that you may have misread the former one and now you are reading the first sentence again. Well these words may have been made up using the same set of letters but are hugely different from each other. You may now very well be wondering that what exactly are Incoterms? Basically Incoterms is an acronym for International Commmercial terms. They are a set of protocols that are used in contracts pertaining to the import and export of goods. These commercial terms are published and reviewed by the International Chamber of Commerce under International Commercial Law. It simply defines the responsibilities of the supplier and the buyer to simplify the process of importing and exporting. You might also be surprised to know that Incoterms dates back its first u...

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