Delivery under the Unpaid Customs
Whenever goods are imported, the recipient is liable for the import duty and other taxes thereon. It is not mandatory for the recipient to make the payment of such taxes before taking delivery of the goods, however, if the import duty or other taxes are not paid immediately, then the delivery of the goods can be made subject to the future remittance of such payments. Such delivery of goods is known as Delivery Against Unpaid Customs (or DAUC).
In effect, the seller or the seller’s agents are the ones who make the DAUC delivery of the goods to the buyer. It is a preliminary step towards making a sale, but the seller isn’t allowed to make the final delivery of the goods if the recipient hasn’t paid the taxes due on them. Thus, the buyer can either pay the taxes due on the import of the goods before taking delivery of the goods or he can arrange to have the payment made in installments over a given period of time with the seller’s consent.
The seller can demand full or partial payment of the import duty and other taxes related with the goods and then make a DAUC delivery to the buyer. This helps to ensure that the seller gets paid for the goods supplied to the buyer. Similarly, in case of DAUC, the buyer can negotiate with the seller and make arrangements to pay the import duties and other taxes in installments over an agreed period of time.
In case of DAUC, it is important to understand the effect of such a delivery on the obligation of the buyer. The buyer incurs an obligation to pay the amount of the import duty plus other taxes related with the goods, even if the buyer takes delivery of the goods under DAUC. In case of default in payment, the buyer is liable to suffer the consequences such as legal action and/or fines.
Therefore, when it comes to delivery of goods, the reference of “Delivery under Unpaid Customs” should be taken into consideration. The buyer needs to know all the details of the import duty and other taxes related with the goods, and then make the necessary arrangements for payment. Additionally, the buyer needs to ensure that the payment of all such bills is made in time as per the agreed terms of the sale, because failure to comply may result in legal action and/or fines.