How ‘Free’ Is Duty-Free?

Let’s figure out the real deal(s).

By Chhavi Doonga

As if to reward you for the long queues at Immigration and Security, there’s Duty-Free. Gleaming chocolate boxes beckon. Perfumes lead you by the nose. Wine bottles seduce you with come-hither price tags.

Should you go?

Well, you’d have to be a Baba Santoshanand to be able to resist the lure of a delightful offer soaked in tax-free alcohol. But before you fall into temptation, there are things you need to know about duty-free shopping. You are put under the illusion that you are getting something for nothing but remember: you’re only avoiding taxes.

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Most of the time the products are not tax -‘free.’ The shops only reduce the imposed import tax. So, it’s important to find out how much tax is on what kind of product and in which country. reveals that the international airports of New Zealand offer the world’s best duty-free bargains on wine, thanks to relatively cheap dollars and abundant local produce. Everyone’s duty-free favourite Dubai does offer amazing prices on gold. At Singapore’s Changi airport, you can buy electronics, watches and cameras at up to 30% less than their retail prices.

Guess what: In most South Asian countries, chocolates, tobacco and alcohol are often cheaper in city outlets than at the airport.

In an interview with CNN, Yngve Bia, former president of the duty-free research company Generation Research, said that prices depend on geography and currency exchange rates.

Here’s a comparison of different product prices in duty-free shops to give you an idea:

Duty-Free shopping
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Namit Vashishta, 24, works with a multinational company and travels abroad 10 months a year. He says, “I have a huge collection of good-quality perfumes, thanks to duty-free shopping. If you know your currency rates, then duty-free shopping can be a good value for you.”

Yash Sood, 26, a former employee of the Delhi Airport Duty-free department says “People often worry that duty-free products are inferior in quality, but that is not true. The tax in these shops is not removed, it’s only reduced.”

Travel Secrets Editor Shubhra Krishan recommends buying exclusive products or limited editions that are not readily available in regular retail stores. “I keep an eye out for special editions of perfumes, cosmetics, alcohol, or luxury items at airports. These are truly worth the price,” she says.

The 3 Commandments of Duty-Free Shopping

Know your limits

Your duty-free might not remain so once you get home! There are limits your home country imposes on purchases abroad. For example, alcoholic beverages. If you return from Europe with $200 worth of purchases, including two litres of liquor, one litre will be duty-free under your returning resident personal allowance/exemption. The other will be dutiable at 3 per cent, plus any Internal Revenue Tax (IRT) that is due.

Duty-Free shopping
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In Europe, there’s a bonus perk: Duty-free shops in airports and ports are ‘tax-free shops,’ too, which means you are spared the value-added tax (or V.A.T., a type of sales tax) that would otherwise be included in the price of goods sold elsewhere in the European Union.  Again, you need to know if the VAT-free price is cheaper than what you get back home.

Don’t Impulse-Buy

While this tip applies to any kind of shopping, it is vital in duty-free; because the price changes with each place. You don’t want to buy something and later realise you get it cheaper at home! For example, an airport duty-free shop might sell you an Armani bag for $450, but you could find it on sale at Armani’s website for just$285.

Wait till your trip ends to shop for duty-free. This will keep your baggage light, help you calculate how much you can spare, and allow you time to compare prices across a few cities.

Identify Your Buy Before You Fly

Want electronics? Don’t buy them in Australia—they are much cheaper in Asia and the US. Craving a cosmetics fix? The Caribbean has tax havens that can save you between 30 to 50% on topline company products. Consider taking a cruise there. Looking for a luxury pewter? Kuala Lumpur Airport—eyes closed! Valuable information like this is sprinkled all over the Internet. Just click ‘Best duty-free deals on cosmetics/electronics/whatever else’ and Go!

Everyone likes to come back home with a bag full of goodies but remember, your pack of memories needs to be chunkier!

So, grab the cheese and avoid the trap.

Happy shopping!

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