Strange Shipping Experience with UPS

[Bimat]

Today, I received a letter from the Austrian Mint. While the mint's service was professional as always, I had a very strange experience with UPS, the shipment carrier.

Surprises began with Austrian Mint shipping my letter with UPS, a private service. All the previous letters I have received from Austrian Mint were sent by Austrian Post, but I think the global disruption due to Covid-19 might be the reason why a private courier was chosen, ok with that.

When sent using Austrian Post, letters typically take a week or maximum of 10 days to arrive and they arrive directly in Mumbai (and not New Delhi as it happens with DHL or Fedex).

The letter was booked on September 7th and as per tracking records, it was in Mumbai on September 11. I thought I would receive it by 14th. I didn't. The letter was then forwarded to Vienna, Austria again on September 16. From Vienna, it was then forwarded to Cologne, Germany. And while it was in their Cologne warehouse, I received a mail from their customer executive (which would have got landed in spam folder easily) saying that I need to show the proof of payment equaling the total invoice value within three days, else I need to pay the complete invoice amount. In case of no response, the letter would be returned to the sender. I provided them the required information and the letter was immediately released and forwarded to....Abu Dhabi, UAE! It reached Dubai International Airport on September 19 and it was then forwarded to Shenzhen, China on the same day. On September 24th, the letter finally arrived in India, at New Delhi and today, I finally received in in Mumbai.

The story doesn't end there. I was charged a custom duty (approximately 42% of the invoiced value) at New Delhi. I wasn't too surprised as this frequently happens with private couriers but the rate was too high IMO. On top of that, UPS charged me another ₹590 as clearance charges, not sure what exactly it means or how it is decided. So overall, I paid 56% of the invoiced value just for custom duty and clearance charges. I will be writing to UPS asking them the basis of their charges.

Has anyone else experienced something similar with UPS, or any other private courier service? Does anyone know if Austrian Mint will be adopting this mode of shipments henceforth, or was it just because of the Covid-19 situation? For me, it wouldn't be an affordable option to buy directly from the mint in case they are going to use private couriers as I can buy the same coin(s) from a dealer instead for slightly higher price and I will still save some money by not paying the custom duty and clearance charges.

In any case, this has to be my first letter which has travelled so much in three weeks - five countries for no reason!

Regards,
Aditya

[Pabitra]

Was a copy of Custom's receipt provided?

[Bimat]

Was a copy of Custom's receipt provided?

Yes! (electronically as well as a hard copy on delivery). Also received receipt for the clearance charges, it says ₹500 for the "Disbursement Charges" and 9% SGST and 9% IGST on ₹500 = ₹590.

Aditya

[redlock]

Austrian Mint changed their shipping (logistics) partner recently. Their products will now be delivered to international locations (meaning any country outside Austria) by UPS.
And yes, the way your shipment was handled (and the way it travelled) is fairly typical for UPS. Sadly, you can expect this, particularly the extra fees, for any further shipment from Austrian Mint.

[Figleaf]

I have only bad experiences with UPS. AFAIK, every country has a de minimis clause in their tax law, that makes it possible for gifts and small value items to pass through customs rapidly and unopened. That's what the green slips are for. UPS, probably on the basis of its US lawyer culture, will present any and all packages to customs at the highest rate they can find and charge the receiver, even if customs declare it free of charge. This may explain why some of your packages are not taxed, others are and why you were hit with the highest rate (e.g. current coins usually attract a border tax of zero).

My experience is that it is no use complaining. They don't answer mail or pass you from one extension to another until you give up or get disconnected. My worst experience is that customs opened the package and the contents slid out because nobody closed it. The enveloppe was delivered open and empty, but only after I had signed for it. UPS blamed customs, customs blamed UPS and I had to pay the border charges anyway.

Your only redress is to demand from the seller that they use regular mail and cancel the order if they refuse.

Peter

[Pabitra]

Yes! (electronically as well as a hard copy on delivery). Also received receipt for the clearance charges, it says ₹500 for the "Disbursement Charges" and 9% SGST and 9% IGST on ₹500 = ₹590.

Aditya

The hobby material upto Rupees 3500/- is supposed to be free from customs duty, to the best of my knowledge.

Alternately, for a registered professional ( numismatist in this case), the exemption under tools of trade should be possible to be availed.

No harm in filing a refund case.

[asm]

If memory serves me correct, gifts from China are now looked at more closely. This was done a year or more back to ensure fraudulent shipments of ordered material from China (shipped as gifts) does not result in any duty evasion (nothing to do with the current border stand off). It was a major racket involving millions of Dollars worth purchases by Indians from China.

Though the material in this case did not originate in China, the shipment came from there. ............

Amit

[Bimat]

Austrian Mint changed their shipping (logistics) partner recently. Their products will now be delivered to international locations (meaning any country outside Austria) by UPS.
And yes, the way your shipment was handled (and the way it travelled) is fairly typical for UPS. Sadly, you can expect this, particularly the extra fees, for any further shipment from Austrian Mint.

Thanks redlock - that's sad to know. Another unfortunate part of the story is that Indian customs imposed the custom duty on the total invoiced value which also included shipping costs (not a small amount) and not just the coins. This is a bad way of looting people and can not be justified.

Austrian mint has a very good team of customer care representatives and I know couple of them very well. I will be writing to them next week seeking more information on the changed shipping policy and why it was adopted. I think it has to do with the large scale disruptions caused by Covid-19 as many of the countries are still not allowing international passenger flights, or allowing it to a very small extent, making it difficult for postal carriers to ship their consignments. India Post too is not accepting any kinds of registered letters to any of the countries, they are accepting speed post (far more expensive) and that too for a small number of countries only. This is just very sad.

Aditya

[Bimat]

I have only bad experiences with UPS. AFAIK, every country has a de minimis clause in their tax law, that makes it possible for gifts and small value items to pass through customs rapidly and unopened. That's what the green slips are for. UPS, probably on the basis of its US lawyer culture, will present any and all packages to customs at the highest rate they can find and charge the receiver, even if customs declare it free of charge. This may explain why some of your packages are not taxed, others are and why you were hit with the highest rate (e.g. current coins usually attract a border tax of zero).

My experience is that it is no use complaining. They don't answer mail or pass you from one extension to another until you give up or get disconnected. My worst experience is that customs opened the package and the contents slid out because nobody closed it. The envelope was delivered open and empty, but only after I had signed for it. UPS blamed customs, customs blamed UPS and I had to pay the border charges anyway.

Your only redress is to demand from the seller that they use regular mail and cancel the order if they refuse.

Peter

Thanks Peter. My letter too showed signs of opening by someone and handling of the coins as the coins were just dumped in the original packet which was shipped by the Austrian Mint. The mint had packaged them well together in a small pouch which was empty in my letter. Seems that UPS put that original packet in another UPS stamped envelope post this check.

I do not know if Austrian Mint's shipping policy allows them to send coins through normal mail and unregistered. Even if it does, it's just not possible for me to opt for it as India is not a safe country when it comes to unregistered letters. There are 99% chances that the letter will disappear or I will receive an empty letter as it has happened multiple times before.

The only other option I have is to provide them alternate, non-India, non EU address where the letter can be shipped. In case of non EU address, one doesn't have to pay 20% VAT on the surcharged coins so you save some money there. I have done that before (by providing a Canadian address of a friend's brother who was to travel to India soon) but that's not possible every time. He typically makes one India visit a year and he himself (along with his brother who is in India) being a coin collector has a large bunch of coins to carry already, so adding my share to it may make his life difficult.

I do have a friend staying in Germany but he will returning back to India as soon as Indian government allows international passenger flights from EU. Have one more friend in Belgium but he doesn't make frequent visits to Mumbai anymore.

Aditya

[Bimat]

The hobby material upto Rupees 3500/- is supposed to be free from customs duty, to the best of my knowledge.

Alternately, for a registered professional ( numismatist in this case), the exemption under tools of trade should be possible to be availed.

No harm in filing a refund case.

The problem here is that Austrian Mint had attached a detailed invoice of my purchase (they always do it), they are legally bound to do it as per EU laws if I am not mistaken. I haven't had any problems with that when those were being sent using Austrian Post, I think private courier consignments are scrutinized more closely by officials and that may be the reason why it was charged so heavily. (By the way, the coins were taxed under HSN code 9965).

I will still try to do some more work on this next week - definitely not giving it away so easily!

Aditya

[Bimat]

If memory serves me correct, gifts from China are now looked at more closely. This was done a year or more back to ensure fraudulent shipments of ordered material from China (shipped as gifts) does not result in any duty evasion (nothing to do with the current border stand off). It was a major racket involving millions of Dollars worth purchases by Indians from China.

Though the material in this case did not originate in China, the shipment came from there. ............

Amit

That's a very good point. A private courier carrying a relatively heavy letter from China is surely going to raise eyebrows at customs' inspection. Still do not understand why UPS had to send the letter back to Vienna from Mumbai on September 11 (and then reroute it around the globe). That's a waste of their logistical resources as well...

Aditya

[Bimat]

Thanks redlock - that's sad to know. Another unfortunate part of the story is that Indian customs imposed the custom duty on the total invoiced value which also included shipping costs (not a small amount) and not just the coins. This is a bad way of looting people and can not be justified.

Some correction here: I just had a detailed look at the customs' invoice and they have charged the custom duty only on the cost of the coins and not shipping...I stand corrected. That means I was charged a custom duty of 66.2% of the contents' value which is simply ridiculous!

Aditya

[Bimat]

I received following response from the Austrian Mint:

[...]

We understand that you are upset about the unacceptable delay in the delivery of your product and offer our sincere apologies.

Unfortunately, due to the Covid-19 crisis, there were many difficulties in sending mail abroad and we were forced to make adjustments here. Our new logistics partner for international shipments is UPS.

[...]

I have asked them if they intend to go back to Austrian Post's service once the situation is normal (nobody knows when that will happen, but still).

Aditya

[FosseWay]

Coronavirus is an explanation for delays. It isn't an explanation for choosing a supplier that can't do the job, unless by some quirk of human immunology UPS employees are immune to covid-19 while those of Austrian Post or other suppliers are not. If that is the case, I think the world's assembled epidemiological institutions would like to know!

Peter mentioned the de minimis clauses that most countries have regarding import duty, that allow you for example to buy goods up to x value when you go on holiday without having to declare or pay tax on them when you return. In my experience, more and more postal services are ignoring these clauses, and in my opinion, illegally. Here in Sweden, for example, you automatically get clobbered for both import duty and a "handling charge" on anything ordered by post from outside the EEA. Note I say "ordered" - this is an issue with commercial mail. The decision to apply the charge is based more on what the packaging looks like than what the value of the item is; the measure is intended to discourage people using Wish and other sales sites outside the EEA and therefore targets packages with corporate branding. You could probably send an Una and the Lion five-pound coin in a normal envelope with stamps and a hand-written address and the customs wouldn't give it a second glance.

Personally I feel that this is taking the wossname. Either you may import up to x value of goods for your own use duty free or you may not. If you may, and you are nevertheless charged duty, the organisation responsible for that charge should be prosecuted for theft. That would soon stop them. To that I would add a charge of abuse of power for the arbitrariness of basing the charge on what the packaging looks like and not what the goods are actually worth. If it's too much bother to investigate properly, then it's too much bother to apply the charge. If it's important to apply the charge, then you resource the process sufficiently to do it properly. You can't have it both ways.

And then there's this 75 kronor handling charge. We pay the postal service to "handle" our mail every time we send something. That's their job. Adding a "handling charge" is a bit like taking money for a bus ride and then charging extra to get the bus to actually stop where you want to get off. In this case, too, the charge is entirely in the control of the postal service - it's not the result of government policy regarding customs duty. It is purely and simply a way for an enterprise to make unjust profit. I see no difference other than scale between the behaviour of Postnord executives on this and people who embezzle their clients' money or indulge in insider trading that devalues people's share holdings. Both of those are serious criminal offences. Again, a few prosecutions for theft (presuming they refuse to deliver items if the handling charge is not paid) would stop this behaviour in its tracks.

[redlock]

Coronavirus is an explanation for delays. It isn't an explanation for choosing a supplier that can't do the job

Well, Bimat did receive the package after all, didn't he? So, UPS did the job get done...

But most Postal Services have had troubles and problems due to the SARS-CoV-2 pandemic. For example, Deutsche Post/DHL still doesn't accept small packages or letters above 500g weight for shipping to Australia (where I have a great trading partner). So, I can understand why the Austrian Mint chose a new partner.