DUTY ELIMINATION: DUTY DRAWBACK
Duty Drawback is a refund of duties and taxes paid on imported goods that are later exported. US-based eCommerce brands can benefit from Duty Drawback by reducing their costs and improving their bottom line. By outsourcing to a Canadian fulfillment centre like CCLS, eCommerce brands can take advantage of Canada's Duty Drawback program, which allows for the refund of duties and taxes paid on goods imported into Canada and subsequently exported. CCLS has the expertise and resources to manage the Duty Drawback process, including identifying eligible shipments, preparing and submitting claims, and ensuring compliance with all regulations. By outsourcing Duty Drawback to CCLS, eCommerce brands can focus on growing their business while we handle the logistics and help them save money.
Typically, CCLS clients that use the Duty Drawback method pay for duties coming into Canada. Once proof is then submitted to the Canadian government, a refund is issued by the Canadian government within 30 -120 days.
What You Need To Know About Canadian Duty Drawback
Canadian Duty Drawback is a program administered by the Canada Border Services Agency (CBSA). This program allows companies to apply for a refund of duties paid on imported goods that are later exported or used to manufacture goods that are subsequently exported.
Here are some key things you need to know about the Canadian Duty Drawback program:
Eligibility: Importers, manufacturers, or exporters of goods are typically eligible for duty drawback. The program covers goods exported in the same condition they were imported, or goods consumed or expended in the manufacturing of other goods for export. It also applies to certain unused goods that are destroyed under CBSA supervision.
Claiming Process: An application must be submitted to CBSA to claim a drawback. This should include necessary documents like import documents, export documents, and proof of the payment of duties. In some cases, a drawback claim can also be filed by a third party on the importer's or exporter's behalf.
Time Limit: The CBSA generally requires that drawback claims be submitted within four years from the date the duties were paid. For this reason, keeping accurate records of all import and export transactions, including duty payments, is essential.
Proof of Export: In order to file a claim for a drawback, businesses will need to provide proof of export. This can usually be done with shipping documents, bills of lading, or other forms of proof.
Amount of Refund: Generally, the refund amount corresponds to the duties paid upon importation. However, there may be some adjustments, and the refunded amount might not be 100% of the duties paid. These details can be clarified with the CBSA.
Compliance: All companies claiming a duty drawback must comply with Canadian regulations. Non-compliance can lead to fines, penalties, or even criminal charges in severe cases.
These are just a few tips on Duty Drawback. For more detailed information, visit the CBSA's official website for the most current information. Or connect with one of our trade policy experts to learn more.
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