I didn't understand this deducting VAT funda...can someone please explain it? Is it given in Amazon.uk?
European countries have implemented VAT. This tax is applicable on all goods/services sold within the nation. In EU nations, all sticker prices must include VAT. But if the goods and services are exported (outside EU) then VAT is not applicable. Hence Amazon, UK (and DE, NL, etc.) show prices inclusive of VAT. When goods are exported out, VAT is not charged and refunded.
In fact, visitors to EU countries can shop in those countries and claim VAT refund on the airport. You have to produce receipts and show the goods being taken out.
Same is applicable in some other nations that have implemented GST (Goods and Services Tax) - an equivalent of VAT. Some examples are Singapore, Australia, NZ, Canada, etc. GST is refunded to visitors shopping in these countries.
On the contrary, USA implements State Sales Tax. State Sales Tax is charged at the time of sale. Sticker prices do not include sales tax. Sales tax is not refundable. But US states charge sales tax for in-state sales only (shop in same state, delivery in same state). For example, in case of Amazon, the e-Commerce shop address is in the state of New York (NY). If someone from NY states shops at Amazon, USA and gets the delivery at her/his NY state address, the invoice will include sales tax (currently 9.5%, I think). But if someone from Dallas, TX shops and gets delivery at Dallas, s/he will pay the sticker price only (no sales tax).
Some states such as Oregon and New Hampshire have no state sales tax.
How does this affect us? As follows:
- if we shop at Amazon, UK, and get delivery in India, we will pay stiker price
less 20% VAT
- if we shop at Amazon, USA, and get delivery in India, we will pay sticket price
- if we shop at Amazon, USA and get delivery via Aramex Shop & Ship, we will pay sticker price + sales tax (because S&S pseudo address is in NY state)
Shipping charges, if any, are extra of course.