- 4 Marks
Question
d) Discuss Duty Drawback as a Custom Regime.
(4 marks)
Answer
- Definition:
- Duty Drawback is a customs procedure that allows for the refund or reimbursement of customs duties, taxes, and fees paid on imported goods when these goods are subsequently exported. The primary purpose of a duty drawback is to encourage exporters by reducing the cost of inputs used in the production of goods for export.
- Eligibility:
- Importers who have paid duties on goods that are later exported as finished products, or as part of other products, are eligible to apply for a refund under the duty drawback scheme. The goods must be exported within a specified time frame, and proper documentation must be provided to support the claim.
- Process:
- The process typically involves the exporter submitting a claim to the customs authorities, providing proof of importation, payment of duties, and subsequent exportation of the goods. The customs authorities then verify the claim and process the refund.
- Significance:
- The duty drawback regime is significant because it helps make domestically produced goods more competitive in international markets by reducing the overall cost of production. This encourages businesses to engage in export activities, contributing to foreign exchange earnings and economic growth.
- Additionally, it levels the playing field for domestic producers who may face higher input costs compared to their international competitors who have access to cheaper raw materials.
- Administrative Costs:
- While duty drawback schemes are beneficial, they also come with administrative costs and the need for careful monitoring to prevent fraud and ensure compliance with the regulations.
- Tags: Customs, Duty Drawback, Export Incentives, Trade Regulations
- Level: Level 3
- Series: NOV 2016
- Uploader: Dotse