Duty Drawback: Are You Eligible?
Duty drawback is a refund of duty imposed by U.S. Customs on imported merchandise or goods that are later exported, unused, or are used to make a finished good. Exports are eligible to be claimed for duty drawback up to three years after the date of export. Duty drawback fuels U.S. exports and manufacturing as it enables U.S. exporters and manufacturers to be competitive in foreign markets by avoiding costs which, in turn, affect the landed costs of the exported products.
There are three flavors of goods eligible for duty drawback:
1.) Manufacturing Drawback
Imported goods or substitute merchandise that is used in the manufacture of a finished good and is later exported or destroyed within five years of the importation, are eligible for duty drawback. Destroyed merchandise requires Customs notification and supervision and must have no commercial value to be eligible for duty drawback.
2.) Rejected Merchandise Drawback
Imported merchandise that is determined to be defective, is shipped without consent, or does not meet sample specifications at the time of importation is eligible for duty drawback and should be returned to Customs’ custody within three years of the original importation to be exported or destroyed. Customs requires the claimant to file notice of intent to export or destroy prior to relinquishing the imported goods into Customs custody.
3.) Unused Merchandise Drawback
Imported goods that are not used or have not entered the commerce of the United States and are exported or destroyed are eligible for duty drawback within three years of the original importation. Customs requires notice prior to the export or destruction of goods to grant U.S. Customs and Border Protection the opportunity to examine the merchandise.
Duty drawback provides an opportunity for importers and exporters to recover costs in an effort to protect their bottom line. RS Express will help you determine your eligibility for duty drawback, file electronically on your behalf, and will create a comprehensive and thorough drawback program specific to your company.
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