Drawback is a program that provides duty refunds for goods that are exported or destroyed after importation. Drawback is a privilege and is only provided to those with precise compliance to the rules and regulations. Our firm provides legal advisement with respect to all the forms of duty drawback including unused, manufacturing, and substitution drawback. Thus, we can assist in ensuring compliance and prompt refund of duties to save you money.
1. Types of duty drawback:
There are three types of drawback: manufacturing, unused merchandise, and rejected merchandise. Manufacturing drawback is a refund of duties, taxes, and fees when imported goods are used as inputs to manufacture a finished product that is subsequently exported. Unused merchandise drawback involves a refund of duties, taxes, and fees on imported goods that were never used in the U.S. and were subsequently exported. Rejected merchandise drawback involves a refund of duties, taxes, and fees paid on imported goods that were not accepted by the U.S. buyer and subsequently exported.
2. Eligibility for duty drawback:
To be eligible for duty drawback, the imported products must have been subject to the payment of duties, taxes, and fees when they entered the United States. The exported or destroyed products must be of the same kind and quality as the imported products, and the drawback claim must be filed within three years of importation.
3. Filing a duty drawback claim:
There are two methods by which drawback claims can be filed: direct filing and through a drawback specialist. Direct filing involves the importer filing a claim with U.S. Customs and Border Protection on their own. It requires a sophisticated understanding of the drawback regulations and thorough documentation. On the other hand, using a drawback specialist involves outsourcing the filing process to a third-party company that specializes in duty drawback. They handle all aspects of the claim filing process and provide a faster and more efficient way of filing.
4. Benefits of duty drawback:
Duty drawback provides significant benefits for importers, including reduced costs associated with duties, taxes, and fees. It provides a competitive advantage in the market by reducing the price of manufactured products and a better cash flow by providing refunds on duties, taxes, and fees paid. Additionally, it provides an opportunity to recover costs of unused or rejected imported merchandise.