What is Duty Drawback?
Duties have become expensive, and if you're importing from China you'll pay even more in duties.. Duty Drawback with Pax AI can make an expensive and time-consuming process easier for you.
What is Duty Drawback?
Duty drawback refunds customs duties on imported goods that are exported, used in manufacturing exported products, or destroyed.
Let's Walk Through an Example
Pax Runners imports sneakers from China into the U.S. and pays a 20% duty on the imported value.
60% of the shoes are sold at its domestic retail stores, while the remaining 40% of the sneakers are exported to stores in Canada and the Caribbean.
The company is eligible for a refund of the 20% it paid in duty when the imported shoes are exported to Canada and the Caribbean.
What Kind of Companies Could Qualify?
Did you know that a company can reach back retroactively and claim duty refunds on imports 5 years ago from the time you are reading this? Companies that import to or export from the US may qualify for duty drawback.
Different "types" or provisions of duty drawback apply depending on the product or material being imported as well as the circumstances of the export:
- Unused Merchandise: Imported material or products exported in essentially the same condition.
- Manufacturing: Raw materials and component parts used to make a new and different article of commerce.
- Petrochemical: Chemicals derived from petroleum that fall within the same 8-digit HTS.
- Rejected Merchandise: Imported materials or products that do not meet specifications at the time of importation or are shipped without the consent of the signee.
Seems Easy... So Why Aren't Companies Doing This Now?
Duty drawbacks are expensive and usually require substantial imports/exports. Most brokers won't work with you if you pay less than $1,000,000 in duties—except for Pax AI.
We make this cost-effective by leveraging our AI-powered software, minimizing manual effort.
How Does Pax AI Tie Into This?
Pax's process starts with a zero-cost eligibility check based on your basic import/export information. If you're eligible, our software and AI do all the hard work for you.
The best part about all this—we don't make any money until we help you get your money back. Even then, we take a fraction of what the industry brokerage standard (5-20%) is today.
We're able to do this because the majority of the costs come from hiring people, but Pax AI is tech-first, and we've built a streamlined way to go from eligibility check to filing a claim.