Duty Drawback is not given much attention and is the least understood process by the exporters. Even its benefits are mostly underutilized and not provided fully to the consignee.
According to U.S. Customs and Border Protection: Duty Drawback is refund or waiver of whole or part of customs duties collected on their imports. The consignee subsequently exports these articles. Moreover, the refund is provided up to 99% on the goods that are exported within the three-year duration from the date of import. However, the exporters can claim the duty drawback within this 3-year period only.
Insight into Significant Concepts of Duty Drawback
According to a study, the exports of US are going to reach up to 211 billion US Dollars by the first quarter of the year 2019. This will be an all-time high from the last year. Let us now see important fundamental concepts related to Duty Drawback for U.S. Exporters.
Refund on Qualified Goods: As the concept of drawback exists in most of the developed nations, so under this fundamental principle of International trade the duties, fees, and taxes paid on the imported merchandise are refunded to the exporters on qualified goods.
Rejected Products or Goods: If the merchandise is destroyed or exported as it was not of original specifications or even shipment was sent without consignee’s consent, then the 99% of the duty paid can be recovered as the Duty Drawback.
Using the Unused Merchandise: The articles that are manufactured in the US with the help of unused imported merchandise and they are destroyed or exported. Here, the exporter is eligible to receive the duty drawback refund from the authorities.
Documentary Proofs: Moreover, it is necessary that the exporters who are filing for the duty drawback refund should present the proof or documentation relative to the destroying or exporting of the merchandise. The process is somewhat complex so the consignee needs to possess every small document too.
The Drawback on the Internal Revenue Tax: Even the drawback is eligible on the Internal Revenue Tax on the products that are manufactured using the domestic alcohol in the US. These goods can be exported as well, and the authorized party may recoup the initial taxes paid by them from the U.S. International Revenue Service.
Drawback Paid on Manufactured Goods: This provision comes under the 19 U.S.C and 1313 (a) and (b) which allows refund on duty drawback on the imported merchandise. The production of these goods is done with the help of domestic merchandise that is later substituted for the imported merchandise.
The duty drawback process involves many fundamental concepts and complexities that can be hard to understand by most of the exports. CITTA Brokerage Co. has a team of expert brokers who are abreast with newer drawback laws and can guide the exporters on every minute aspect. Call our advisors today to book your appointment for duty-drawback refund details.