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Often a client contacts us with a request to begin a drawback program and then is surprised to find out that everything he or she paid isn't eligible to be refunded. For example, a client may have paid 115 percent in antidumping duty that another broker had said would be eligible-only to find out later from us that it isn't.
So, don't find out the hard way. Here is a list of the most common types of duty and fees that are and are not eligible for refund. (Remember that Customs keeps 1 percent for themselves, too.)
> Regular Duties - Almost always eligible under most circumstances.
> MPF - This fee is now eligible and, in fact, Customs is redesigning the drawback form to more efficiently accommodate MPF claims.
> IR TAX - Alcoholic beverages carry a high tax that is available via Customs.
> IR TAX - Tobacco also carries a high tax. But to claim the tax for refund, you have to apply to not only Customs, but the BATF as well.
> 201 Duties - aEligible as of this writing. One example: The recent steel tariffs.
> Chapter 99 Duties - Almost always eligible. If in doubt on a particular HTSUS, contact a drawback center or specialist just to be sure.
> ADA Antidumping - Antidumping used to be allowed, but for many years has not been available.
> CVD - Same as ADA (not eligible).
> Penalties - Penalties are not refundable via drawback. Even a TIB breach (which is based on 110% of the normal duty) isn't eligible, because it's a penalty.
> HMF - Harbor maintenance fee isn’t refundable as of this writing.
Remember that only the eligible duty that is actually paid will be considered for drawback. If an entry is protested between the time of entry and drawback claim filing, that fact needs to be declared and factored into the drawback claim. This goes for Post entry amendments, SILS, and even voluntary tenders and prior disclosures. Customs looks very disfavorably toward an exporter that has gained a refund via protest, then attempts to do so again via drawback.
There are many changes now being discussed with trade groups concerning drawback and we expect to see some significant modifications in the next few years. Stay tuned...
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