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Duty Free shops inIndia

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Definition:

[Tax Free Shop in Dubai Airport]

Merchandise on which import duty is not charged because it is sold only to departing

passengers in an airports or ports departure lounge(which are bonded areas). Non-residents can

buy it outside of bonded areas on presentations of valid travel documents(such as a passport &

travel ticket) but can collect the purchased item only at the departing point.

Duty Free Shopping are retail outlets that do not apply local or national taxes & duties.

Duty free shopping is a bit of misnomer though because shoppers may still have to pay duties in

their home country on items purchased from a duty-free shop. They are often found in the

international zone of international airports, sea ports or on board passenger ships. They are not as

commonly available for road or train travellers, although several border crossings between the

United States & Canada have duty-free shops for car travels.

These outlets were abolished for travel within the European Union in 1999, but are

retained for travellers whose final destinations is outside the EU. They also sell to intra-EU

travellers but with appropriate taxes. Some special member state territories such as Aland,

Livigno & the Canary Islands, are within the EU but outside the EU tax union, & thus continue

duty-free sales for all travellers.


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Trammell Crow Meghraj Retail Services president Shuhranshu Pani concurs, A

passenger generally scouts for products at the duty free since they are available at a relatively

lower price than elsewhere in the country. Also, it saves passenger from carrying more baggage.

History:

The world's first Duty Free shop was established at Shannon Airport in Ireland by Dr

Brendan ORegan in 1947 and is in service to this date. Designed to provide a service forTrans-

Atlantic airline passengers typically travelling between Europe and North America whose flights

stopped for refuelling on both outbound and inbound legs of their journeys, it was an immediate

success and has been copied worldwide.

Duty free shopping was in its infancy when two American entrepreneurs, Charles Feeney

and Robert Miller, created what is now Duty Free Shoppers (DFS) on 7 November 1960. DFS

started operations in Hong Kong and spread to Europe and other places around the globe.

Securing the exclusive concession for duty free sales in Hawaii in the early 1960s created a

business breakthrough for DFS, and the company was positioned to focus on emerging Japanese

travelers. DFS continued to innovate, expanding into off-airport duty free stores and large

downtown Galleria stores and grew to become the worlds largest travel retailer.

In this same period, several locales grew as duty free shopping destinations. They are

exemplified by Saint Martin and the U.S. Virgin Islands in the Caribbean, Hong Kong and

Singapore. Still others claim prices competitive to duty free. Generally, goods are free of duty

and tax levied on imports for sale anywhere in the shopping destination. Merchants may pay

inventory/business or other taxes, but their customers usually pay none directly. Buyers must

declare all purchases (duty-free or otherwise) as they enter any duty-levying country.

The mere absence of duty or other taxes on goods being sold does not assure that they are

bargains. Costs of identical goods from different duty-free sources can vary widely. They often

depend on the presence or absence of nearby competition, e.g., airport stores, especially if all at

any airport are owned by a single firm such as Dufry). Also, prices can often be driven upward

by the costs of buyer convenience, e.g., in-flight-sales by airlines.


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India:

The concept of duty free has not been fully realized in India as compared to other parts

of the world. Indian airports have been generating majority of their revenues from aeronautical

services like airport charges. The ratio of aeronautical & non- aeronautical revenues is 85:15 in

India, while it is almost 50:50 in developed countries. Says Alpha Airports Group MD (Asia)

Paul Topping In India, duty free shops have limited variety & the pricing is also enticing. Sales

& service taxes in India undermine the concept of duty free shopping.

India duty free shop have an abysmal (extremely bad) record when it comes to attracting

air travellers. While the average spends per passenger are around $18 worldwide & $8 even in

countries like Sri Lanka, where the passenger traffic is comparatively lower, at duty free shop in

India this figure falls to a low of $1.5 on an average per person.

[Duty free Shop at New Delhi International Airport]

This despite the fact that passenger from the Indian sub-continent generate over 30% of

the total revenues in the famous Dubai duty free shop, according to a research by Alpha Airports.

Retail analysis feel that duty free shops should provide a propositions, which high streets or

mails do not provide in that particular country.


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Despite this Topping expects that in the next 2-3 years with delhi, Mumbai & a number

of others airports being modernised, airport retailing in India will generate business of around

$650 million. Says Kapil Kaul of the centre for Asia Pacific Aviation, Airports are gradually

becoming supermarkets, where one can also take-off & land, Post-modernization, Indian airport

retailing would gain momentum since the much needed infrastructure issues are being

addressed.

[Mumbai Airport duty Free Shop]

[Punch-Platino-Cigar at New Delhi Airport]

The following goods may be imported into India without incurring customs duty:


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y 200 cigarettes or 50 cigars or 250g of tobacco.y Up to 11 each of alcoholic liquor & wine.y Goods for personal use.y Reasonable quantities of medicine.

Note:

(a) Import by non-residents is only permitted if the national has entered India for a stay ofnot less than 24 hours & not more than six months, provided they visit not more than

once a month.

(b)Domestic pets are permitted to be imported into India as long as they have a healthcertification from the country of origin.

(c)Cash/travellers cheque totalling more than US$10,000 are supposed to be declared atcustomes.

Prohibited Imports:

Livestock, live Plants, illicit drugs, weapons, gold amd silver bullion.

Promote Tourism Duty Free Shops:

New Delhi July 14, in its effort to promote Indian tourism, despite the fall in tourist

traffic following adverse advisories to tourists by developed countries, the ITDC has launched a


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Duty-Free Shopping Festival on the occasion of the Rajasthani Teej festival at the Indira

Gandhi Internatioinal airport here. The festival will be on till August 15.

[Duty Free Shop at Thiruvantampur]

The festival is modeled on the lines of the Malaysian and Singapore festivals in that it

offers discounts on minimum purchases and it is one of the many that ITDC plans, to meet a

target turnover Rs. 15 crore in this fiscal as against Rs. 85 crore earned last year. There was a fall

of about 14% in the duty free earnings last year due to decline in tourist traffic.

Future Projection & Growth:

[Banglore Duty Free Shop]


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The Duty Free Shops in India have recently metamorphosed(Change in form nature) the

most cost effective and quality conscious Duty Free Retail outlets in the whole region. As part of

overall strategy of making India the most preferred destination, we have introduced incridible

product promotions, retionalized our prices and remodeled our shops to provide you with an

incredible shopping experience. We have exclusive boutiques where you can sample our

exquisite range of the latest international products from fragrances and cosmetics, cigars, and

handicrafts et al with access to our specialist product advisiors for export guidence.

Advantages of Duty Free Shops:

Prices are amongst the cheapest in the word. Products of only reputed companies are stocked. Products to suite every pocket from the most exclusive brand names to inexpensive

utility items.

Courteous and efficient staff to help make your selection easy. You do not have to carry a heavy shopping bag as the shops are located in the arrival

halls as well.

Additional advantages do you get buying at Duty Free Shops in India:

An excellent array of Made in India products like herbal cosmetics, tea, electronics,

champange etc., as well as a large assortment of handloom and handicraft items are stocked in

the departure louges besides the regular assortment of international merchandise.

Pre-reservtion service at the time of departure from India provided you can plan to return

within on month. You can book any item by depositing US$20.00 only (which will be adjusted

against the final price of the product you book) and we will keep that items ready for you at our

arrival shops. Items provided at duty free shops in india are:


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[Luxury Vodka Collection at New Delhi Duty Free Shop]

Liquor, Premium scotch whsky, Regular scotch whsky, Malt whsky, Cognac,

Champagne/ Sparkling wine, Gin, Rum, Vodka, Beer, Indian Liquor, Chocolates, Confectionery

and Tea, Switzerland Mars, Netherlands Nestle, Switzerland Cavendish & Harvey ltd., U.K.

AAP KI PASAND twinnings Perfumes and cosmetics Christain Dior Escada, Elizabeth Arden

Gucci fashion and other accessories Jewellery, watches, toys, international brand sun glasses,

cigarettes, Indian products, Indian Tea, Indian hendicrafts.

Suggestions:

Duty free shops are generating most revenue at airport. In india, the concept of duty free

shop is not as much as developed as other countries. In india, ratio of revenue generated by other

airport services and duty free shop is 85:15 which is not good because this ratio is 50:50 in other

countries duty free shops. Indias airport can generate more profit or revenue by developing the

concept of duty free shops.


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Bibliography

1. http://en.wikipedia.org/wiki/Duty-free_shop2. http://www.google.co.in/imgres

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