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Section 301 Duty Drawbacks: A Guide For Importers

August 13, 2020
Alana Wilson
Filing for section 301 duty drawbacks or tariff refunds? Our Licensed Brokers can help you submit your request to receive the maximum refund quickly.
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Section 301 duty drawbacks are refunds associated with tariffs and customs duties applied to China-origin products under the section 301 act. Duty drawbacks, or refunds, of these duties can only occur under specific circumstances.

There are multiple steps that must be followed closely to process section 301 duty drawbacks or tariff refunds. Failure to follow the necessary steps or submit the request in a timely manner will lead to your refund being denied. For this reason, many importers choose to work with a licensed customs broker.

Our Licensed Customs Brokers have helped clients receive millions in section 301 refunds. Speak to our experts today to find out how much you can receive.

How to Apply For Section 301 Tariff Refund

The easiest way to apply for a section 301 tariff refund is to work directly with a Licensed Customs Broker. USA Customs Clearance, powered by AFC International, employs experienced and knowledgeable brokers that can process and submit your section 301 tariff refund.

The refund is completed by filing a Post Summary Correction (PSC) to CBP within a specified time period. This time period will vary based on when your goods were imported, as well as the exclusion timeline. The PSC must be completely accurate and state under what circumstances the refund should be granted. Errors in completing the PSC or failing to meet the deadline will likely lead to your request being denied.

Our team of Licensed Customs Brokers can work with you to ensure your refund is accurately completed and submitted on time. Since January 2020, we've helped our clients recover millions in section 301 duties. Schedule a 1-on-1 consulting session with our experts. In your session, our experts evaluate your unique importing situation to determine how much of a refund you're eligible for.

Our Licensed Customs Brokers have helped clients receive millions in section 301 refunds. Speak to our experts today to find out how much you can receive.

What Section 301 Goods Are Eligible For Duty Drawback?

Goods that have been included in product/tariff exclusions by the USTR are eligible for a tariff refund. There are various products from each list (1-4) that have been excluded from section 301 duties.

In many cases, the key to determining wheter your particular product is eligible for a section 301 tariff refund is the HTSUS code. This is a unique 10 digit number assigned to each unique product being imported into the U.S. If the HTSUS code of a product you previously imported has since been excluded from 301 tariffs, you'll be eligible for a 301 duty refund. It's important to note that this refund is retroactive to the date that the additional tariff went into effect.

In addition to products covered under any of the tariff exclusions, general duty drawback rules also apply to section 301 goods.

Your goods are also eligible for duty drawback if:

  • After being imported into the U.S., they're subsequently exported without ever entering U.S. commerce
  • After being imported into the U.S., they're legally destroyed or disposed of without ever entering U.S. commerce

If you're unsure if goods that you've previously imported are eligible for a tariff refund, our team can help you. In fact, during a customs consulting session with one of our Licensed Customs Brokers, we'll let you know exactly how much of a refund you're eligible for. This is in addition to preparing and filing the refund on your behalf.

Our Licensed Customs Brokers have helped clients receive millions in section 301 refunds. Speak to our experts today to find out how much you can receive.

How Long Will it Take to Receive a Section 301 Drawback Refund?

The amount of time it takes to receive a refund is dependent on if you’re business has ever filed a duty drawback before. If you are already a member of Drawback.NET, a claim can be generated in just one to two weeks, most of your information is auto-filled. A refund can be expected about a month after the claim has been filed. 

However, if you are new to requesting duty drawbacks, applying to customs for privileges is mandatory. These benefits include accelerated payment requests and waivers for prior and future notice. Once these forms are completed, it could take between 3 and 6 months for authorization. If a form is sent to a drawback center for manufacturing products rather than to customs headquarters it should only take 3 months for approval. 

After all requests have been submitted and approved, drawback checks should be disbursed in 6 to 8 weeks. 

When you work with our team, we'll let you know when to expect your tariff refund. We'll also provide updates along the way as we receive them from CBP.

How Much of a Refund Will I Receive?

How-Much-of-a-Refund-Will-I-Receive

99 percent of paid duties can be refunded, a portion of the refund goes back to customs and the duty drawback office as a fee for their services.

The accelerated payment privilege allows for a quick refund that takes place shortly after the drawback is filed. Many times, businesses will initiate a claim a year after the exemption has been announced, forfeiting the privilege.  Essentially, the quicker you act, the faster you'll receive your refund.

Considering the range of additional duty tacked onto Section 301 products is anywhere from 10-25%, the refund can be quite substantial. As noted earlier, we've recovered millions in section 301 duties for our clients.

If you're looking for a complete look at everything related to the Section 301 tariffs, take a look at our article Section 301 Tariffs: A Comprehensive Guide.

Will More Section 301 Goods Be Eligible for Duty Drawback in the Future?

It's unlikely that additional products subject to section 301 duties will be eligible for refund in the future. The USTR has closed the exclusion request window for all products. However, exclusions that were previously scheduled to expire have been granted an extension in many cases. Because of this, it's still advisable to speak with one of our Licensed Brokers to find out if your product is eligible for a refund.

For more information about the exclusion extensions, take read through our section 301 tariff exclusion extension article.

Working With a Customs Consultant For Section 301 Duty Drawback

Applying for Section 301 duty drawbacks can be extremely complicated. A plethora of paperwork is involved in the approval process and it must be done perfectly. One error in any document, especially the HTSUS code could force you to start the entire process over, or even worse receive a denial letter.

Trusting an import customs broker can be the answer to your section 301 duty drawbacks issues. Our skilled and friendly consultants will teach you all you need to know about duty drawbacks and we can even help you file as well. Call 855.912.0406 today to get a thorough customs consulting service that will answer all of your questions! 

Our Licensed Customs Brokers have helped clients receive millions in section 301 refunds. Speak to our experts today to find out how much you can receive.

2 comments on “Section 301 Duty Drawbacks: A Guide For Importers”

  1. We purchase from a USA company items that they import in from China. We have one customer that we sell to in Canada. Would we qualify for Duty Drawback?

    1. Hi Gayle,

      It's possible that you could qualify, but it will depend on a number of factors. These include providing adequate proof of export out of the U.S., who the official Importer of Record is, and more.

      We've replied privately with additional information to assist you.

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