Manufacturers who import raw materials or components and export finished goods are among the strongest candidates for duty drawback. Manufacturing drawback under 19 USC 1313(b) allows recovery of up to 99% of the duties paid on imported inputs used in exported products.
You import specific materials, use those exact materials to manufacture finished goods, and export the finished products. The imported materials must be traced through your manufacturing process to the exported goods.
You import materials and use commercially interchangeable domestic or other imported materials in manufacturing. The exported finished goods don't need to contain the actual imported materials — just materials that are functionally equivalent.
A steel manufacturer imports raw steel, manufactures structural beams, and exports finished beams. Alternatively, they use domestic steel of the same grade for production and claim substitution drawback against the imported steel duties.
A circuit board manufacturer imports semiconductor components, assembles boards domestically, and exports finished assemblies. Drawback recovers the duties paid on the imported components.
A chemical company imports base chemicals, processes them into specialty compounds, and exports the finished chemicals. Manufacturing drawback applies to the imported feedstock duties.
A food processor imports raw ingredients (sugar, cocoa, oils), manufactures finished food products, and exports them. Duties on the imported ingredients are recoverable through drawback.
An auto parts manufacturer imports components (castings, forgings, raw materials), manufactures finished parts, and exports to overseas assembly plants. Drawback applies to duties on imported inputs.
A detailed BOM showing the relationship between imported materials and finished goods. Must list each component, quantity per unit of finished product, and waste/scrap factors.
Production records that trace materials through your manufacturing process. These don't need to track individual molecules — but must show the process and input-to-output ratios.
CF7501 entry summaries showing the duties paid on imported materials. Must include HTS classification, duty rates, and quantities.
Proof that the finished goods were exported — AES filings, bills of lading, and commercial invoices showing the goods left U.S. commerce.
Manufacturing processes produce waste and scrap. CBP accounts for this in drawback calculations. Your BOM should include yield factors — the ratio of finished goods output to raw material input.
If waste has commercial value (e.g., metal scrap that can be sold), the drawback amount is reduced proportionally. Valueless waste does not reduce your claim.
DutyDrawback.ai handles waste calculations automatically when you provide your BOM — including multi-level BOMs where sub-assemblies feed into final products.
Upload your import data, export records, and bill of materials. Our AI handles matching, waste calculations, and ABI-compliant file generation.
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