Exploring Duty Drawback
If you are an exporter or an importer or running a business that includes you to buy and sell in other countries, you might be aware Duty Drawback.
This is a principle by which the exporters can expect a refund on certain duties and taxes they paid for customs duty while importing. Nevertheless, in order to be eligible for duty drawback, you must be the exporter of record or have sold your product to a client who subsequently exports. Even if you get to export them unused, then you will get the refund by the way of the Duty Drawback.
A Little Info About Duty Drawback
Exporters can expect as much as 99% of duties.
Duty Drawback is a mandatory refund that the US Customs gives to the exporters if they choose to file.
Drawback requires the exporters to use or incorporate or even destroy the goods in three years time after it enters the US.
However, when it comes to filing a claim a shocking statistic shows the crucial impact that duty drawback refunds are overlooked. As per a study in 1997, exporters only had claimed $550 million of the $22.9 billion that the US Customs had collected.
Drawback was created with the aim of encouraging US-based exporters to benefit by their imports while also being competitive producers themselves. With this in mind, Customs thought of refunding 99% of duties as per the amendment by the Congress in the 1980s.
This will increase the number of US-based businesses, thereby giving more boosts to the job market too. Besides that, it helps in reducing the actual price of a product or adding to the bottom line when refunds are returned. Overall, duty drawbacks signal great times for any country.
However, where in the past, there were issues about people not claiming much; today time has changed for the better. With the internet, this kind of information cannot remain under the carpet for long. In fact, as per the reports, the CBP paid excise tax refund of $54.9 million in the fiscal year of 2015, showing that businesses are rising up to make Duty Drawback in the US an important revenue source.
This is why today’s businesses are keeping tabs on the changes and making sure that they learn exactly how to qualify for drawback. Espcially as these 301's become a major issue in growing tariff wars.