Canada has seen a huge rise in import initiatives, leading to its economic growth. But, the major drawback of this initiative is “Duty”. For every item imported into Canada, companies have to pay taxes in the form of duties. Taxes or duties quickly add up the cost over time.
The CBSA duty drawback program is a way to recoup these additional costs under certain conditions, reducing total spending and boosting ROI.
In this post, we will discuss everything about duty drawback CBSA (Canada Border Services Agency).
How does the CBSA duty drawback program work?
It’s the refund of customs duties paid for imported goods. The agency designed a program to offset the cost of importing goods that are later exported to another country. Through this program, businesses can apply for a drawback on the duty paid to import goods and have some or all of their CBSA excise refund.
An example of the CBSA duty drawback program:
A business imports ceramic coffee mugs and exports them to retailers in another country. Under the drawback program, the business can apply for a CBSA excise refund of the duty paid on imported goods as long as they were not for sale or use within Canada.
Do all businesses and goods qualify for the CBSA duty drawback program?
To qualify for duty drawback CBSA, the business doesn’t have to operate within a specific industry or market niche. They can apply for the program by meeting any one of three conditions.
- When goods are imported and later exported as it is
- When goods are used to produce other goods for exports, such as the parts used to manufacture a product
- When obsolete or surplus goods are imported and subsequently destroyed rather than being sold in Canada or exported
By meeting one of these three conditions, the importer or exporter of the imported or exported goods, the processor, or the owner or producer of those goods can claim a refund. The claim time is between their direct shipment to Canada and their export or deemed export.
Regarding goods that qualify for CBSA duty drawback, there are very few limits. Textiles, glass, and vehicles such as aircraft and automobiles are eligible for some degree of drawback. The program does not apply to spirits, wine, or beer. Fuel and plant equipment are other categories that aren’t subject to drawbacks.
In addition, a refund is not applicable if the goods are damaged before being exported.
How to apply for a CBSA excise refund
To apply for CBSA duty drawback, businesses should submit claims within four years after the goods arrive in Canada, expectations are the destroyed goods. The destroyed goods can be claimed up to five years after arrival. The agency might consider extensions on a pre-application basis.
Businesses need to understand that there is no guarantee that the goods will be refunded in full. If CBSA has made a partial refund, they will pay any agreed-upon balance owed after the claims are verified. In the case of a full CBSA excise refund, the payment will happen within 90 days. CBSA also pays the interest on any outstanding balance owed if the 90-day time limit is exceeded.
The bottom line
At Re-source Recycling, customers are our priority. We will do everything to power your goods efficiently and cost-effectively. Most importantly, we will assist you in quality and applying for the CBSA duty drawback program.
If you are ready to get started, get a quote from us.
