Understanding the Duty Drawback Scheme

With a view to encouraging exports from a country, the scheme for refund or reimbursement of customs duty, etc. levied on the input goods has been in place, which is referred to as Duty Drawback Scheme. The Continental Congress introduced the scheme in the year 1789 for limited merchandise. However, the scope includes Agricultural products, Automotive, Consumer goods, metal and alloys, petrochemicals besides the pharmaceuticals and medical equipment.

Duty Drawback Conditions

• The goods should have been imported by paying the necessary duty.
• The goods should have been identified by the authorities concerned at the time of import
• The documentation of shipping through sea/land/post/air for export
• The market price should have been more than the drawback claim claimed
• Buy imported products from the domestic market for prospective export
• Sell the imported products to domestic customers for export at a later stage

If the answer for the above questions is affirmative, it would be wiser to check with the consultant for determining your eligibility for claiming the drawback of duty.

Refund Policy

While you might be eligible for the Duty Drawback claim, perhaps, your ignorance might cost you substantial money, which you were entitled otherwise.  It might astound that a whopping $2 billion duty drawback goes uncollected in Canada and the USA each year.

Manufacturing Drawback

In a manufacturing industry, the time limit set out for claiming the duty drawback is three years from the date of export, and five years reckoned from the date of import of the merchandise. In order to authenticate the claim, the documents of inventory and other relevant records must conform to the specific formats.

Unused Merchandise

In case the merchandise imported is not used within three years, you can claim the drawback. In case you are exporting the merchandise in an unused condition also, your claim for drawback is valid. However, such a claim should follow a proper notification to the U.S. Customs authorities.

Rejected Merchandise

If you have received any merchandise without your consent, you are eligible for the drawback claim while exporting the merchandise back. You must file the drawback claim within three years from the import date. Please do not ignore to notify the U.S. Customs authorities before the export date.

If you want to let the import duty go under the drain, you can ignore. Otherwise, you can get in touch with the professional consultants for easing the process of the drawback claim under the relevant rules.