GlossaryEN1 min readUpdated: Jun 18, 2026

duty drawback (customs duty refund)

Duty drawback allows a manufacturer or exporter to recover import duties already paid on goods that are subsequently processed and re-exported as part of a finished product.

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Last updated: 18 June 2026Published: 27 January 2026

Source: https://en.wikipedia.org/wiki/Duty_drawback

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Definition & Explanation

Duty drawback allows a manufacturer or exporter to recover import duties already paid on goods that are subsequently processed and re-exported as part of a finished product. The mechanism prevents duties from acting as a cost burden on goods that never ultimately remain in the importing country. It is widely used in industries with high-volume import-and-export cycles – textiles, chemicals, and metal fabrication among them. Claims require meticulous documentation: authorities must be able to verify that the imported inputs, or fungible equivalents, were indeed used in the exported goods. Drawback differs from customs suspension regimes such as inward processing relief, where duties are suspended upfront and never paid in the first place; drawback involves payment first, refund second.

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duty drawback (customs duty refund)

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Related Terms

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