What is Duty Drawback?

What is Duty Drawback?

At Customs Clearance Intl., we offer a wide range of services designed to ensure your import and export experiences are as smooth and stress-free as possible. These services including the following:

  • Door to door transportation
  • Licensed Customs Broker (ACE)
  • Licensed Ocean Freight Forwarder (OTI #018736F)
  • All services offered for air, ocean, truck, and rail transportation
  • Warehousing distribution
  • Packing and crating
  • Customs bonds
  • Cargo insurance
  • Duty Drawback
  • LTL/FTL Domestic Truck Service (MC#811192)
  • Freight Payments Audits
  • Freight Consolidation Services
  • Remote Location Filing (RLF) at all US ports of entry via air, ocean, rail, or truck

Defining Duty Drawback

You may be wondering, what is Duty Drawback? It’s a question we often hear from plenty of people who are considering partnering with us for import and/or export services. Duty Drawback is also known as Drawback. According to the United States Customs and Border Protection (CBP), it refers to the refund of certain duties, internal and revenue taxes and certain fees that are collected upon importation of goods. Duty Drawback refunds are only issued upon the exportation or destruction of goods under the supervision of the U.S. Customs and Border Protection department. Duty Drawback policies were established in 1789 to promote US innovation and manufacturing across the global market. It’s an export protections program that’s sanctioned by the World Trade Organization. This program allows US Importers, Manufacturers, and Exporters the opportunity to be more competitive on the global market. Any party along the supply can may benefit from duty drawback.

To be a bit more specific, during duty drawback, a claimant may recover the following duties, taxes, and fees paid on the imported merchandise:

  • Duties paid on an entry, or withdrawal from warehouse, for consumption
  • Voluntary tenders of duties
  • Marking duties
  • Internal revenue tax
  • Harbor maintenance tax (except manufacturing drawback)
  • Merchandise processing fees (except manufacturing drawback)

Submitting duty drawback claims involves turning in claims under either a continuous or single bond. A drawback claim requires all the details of the import including CBP Form 7501 and commercial import invoice, the export including the export bills of lading, commercial export invoice, the export including the export bills of lading, commercial export invoice, and information regarding the manufacturing (if applicable). If this is your first time applying for duty drawback, you’ll need to submit the following additional forms:

  • Waivor or Prior Notice of Intent to Export
  • Retroactive Waiver
  • Accelerated Payment Procedure (optional, but often recommended)
  • Specific/general substitution applications as needed

Is your head spinning?

Duty Drawback is a pretty complicated policy that requires the submission of various forms. If it’s your first or hundredth time applying for duty drawback, we would love to help you navigate the entire process, and perhaps even handle it on your behalf. Give us a call at 1-310-322-3228 to get your questions answered and get started today.

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