Duty Deferral Program - Duty Drawbacks

This program helps Canadian companies compete in export markets by allowing them, under special circumstances, to recover duties they paid on imported goods. (You cannot recover GST payments under this program.)

Eligibility Criteria

Importers, manufacturers and exporters may be eligible. When more than one person is eligible to file a drawback claim, the Canada Border Services Agency (CBSA) needs waivers from the other eligible claimants before it can process your claim.

Summary

Canadian companies may recover import duties (but not GST) under the following circumstances:

 

• export of Canadian manufactured goods;
• import and subsequent export of goods;
• destruction of obsolete or surplus goods.

Imported Goods Further Processed or Manufactured in Canada and Exported

Claimants can recover import duties on goods and materials they use to produce products that they later export. After the goods have been exported, the manufacturer or exporter can claim a drawback of duties paid if the finished goods were not used or damaged before export. The claimant has to submit an application for drawback to a customs office within four years of the date of duty payment. In cases where the eligible goods are exported to the U.S. on or after January 1, 1996, or to Mexico after January 1, 2001, NAFTA may restrict the amount of drawback granted. Customs Memorandums D7-4-2, Duty Drawback Program  outlines this process. 

Goods Imported and Exported Drawbacks

Imported goods that have not been used or damaged while in Canada may be eligible for a duty drawback after they have been exported. Under the regulations Customs Memorandums D7-4-2, Duty Drawback Program , the importer or the exporter can file a claim for duties paid on goods exported in the same condition. The claimant must file the claim within four years of the date of duty payment. The CBSA will also consider the goods to be exported when the importer or exporter places them in a bonded warehouse or a duty-free shop.

Obsolete or Surplus Goods Drawbacks

Businesses can also recover duties paid on unused and undamaged goods that the owner finds are obsolete or surplus. The company must destroy these items in Canada under CBSA supervision to be eligible for the drawback. Claimants have five years from the date of duty payment to file a claim as outlined in Customs Memorandum D7-2-3, Obsolete or Surplus Goods. 

If you require personal assistance contact the Customs Client Services Office closest to you (see Related Reading: Customs Offices - Supplement or from Canada Border Service Agency's Web site for a list of addresses).

*Note: To download publications in PDF format, Adobe Acrobat Reader is required (available free of charge).

Manitoba Contact(s):
See National Contact.

 

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National Contact(s):
Border Information Service - BIS
Canada Border Services Agency
Telephone: 204-983-3500 or 506-636-5064 (for calls outside Canada)
Toll-free (information): 1-800-461-9999 (for calls within Canada)
Web site: http://www.cbsa.gc.ca/menu-eng.html