Duty Drawback in Australia: How Exporters Claim Refunds

What Is Duty Drawback?

Australia charges customs duty on many imported goods when they are entered for home consumption. When those goods never end up being consumed here, because they are sent back out of the country, the duty drawback scheme lets the owner recover the duty that was paid. For forwarders and customs brokers, it is one of the few points in the customs cycle where money flows back to the client rather than out.

The Short Answer: Duty Drawback Defined

The Australian Border Force (ABF) describes duty drawback as a scheme that lets exporters claim a refund of customs duty paid on imported goods that are exported from Australia and are either unused since importation, or treated, processed or incorporated into other goods for export. The ABF's duty drawback page sets out the current requirements.

The legal basis is section 168 of the Customs Act 1901, with the detailed rules in Part 7 of the Customs (International Obligations) Regulation 2015. Part 7 covers which goods qualify, when drawback is not payable, the conditions a claim must meet and how the claim amount is worked out. Those are the rules this guide follows.

If you have read US material on drawback, set it aside: the US scheme runs under different legislation, with different refund rules, deadlines and exclusions, and very little of it carries over to an Australian claim.

Who Can Claim

You may be eligible to lodge a claim if you are the legal owner of the goods at the time they were exported from Australia. That is not always the importer. A distributor that buys imported stock from an Australian importer and then exports it can be the claimant, provided it can show the chain back to the original import.

That chain is where many claims fall over. The ABF states that where imported goods have been sold in Australia since importation, the claimant is responsible for maintaining records, and must be able to show each sale of the goods since importation so the exported goods can be traced back to an import entry on which duty was paid. Settling who will hold those records, and how the supplier will provide them, is easier before the goods ship than after.

Claimants are identified by an Australian Business Number (ABN) or a Customs Client Identifier (CCID). If you are the importer, the ABN or CCID is quoted on your Import Declaration. If you are not the importer and do not have an ABN, the ABF requires you to complete the "Registering as a client in the ICS" form (B319) so it can issue a CCID.

Why Refunds Go Unclaimed

Eligible drawback often goes unclaimed for operational reasons: nobody realises re-exports qualify, nobody can say which import declaration a pallet came from, or the amounts look too small. Yet you have 4 years from export to lodge, and small amounts can be combined to reach the A$100 minimum. Common overlooked sources include:

• faulty or unwanted goods returned to overseas suppliers
• stock re-exported to a related company or regional hub offshore
• imported components built into goods that are then exported
• imported goods repacked or relabelled in Australia and shipped to overseas customers

Each leaves a trail in shipment, stock and customs records. Whether that trail can support a claim is covered later in this guide.

Which Goods Qualify, and Which Do Not

Part 7 of the regulation recognises two broad situations: imported goods exported in the condition they were imported, and imported goods used in Australia to make, process or treat other goods that are then exported. The category you fall into decides how the claim is worked out and what records you need.

Goods Exported Unused

Under section 34 of the regulation, drawback may be paid on the export of imported goods on which import duty has been paid. The key restriction is that drawback is not payable on second-hand goods, which the regulation defines as goods that, after their first importation into Australia, have been used other than for the purpose of being inspected or exhibited. Goods that were demonstrated at a trade show can still qualify. Goods that were put to work in a business cannot.

Manufactured, Processed or Treated Goods

Section 35 covers imported goods that were used in Australia to manufacture other goods, or were subjected to a process or treatment to produce other goods, where those other goods are exported. Drawback may be paid for the imported goods that were used, lost or wasted in the manufacture. The regulation states that manufacture includes the process of packaging the goods.

Two limits apply. First, the exported goods must not themselves have been used in Australia other than for inspection or exhibition. Second, the ABF notes that imported goods used in manufacturing goods for export, such as manufacturing machinery or filtration material, are not eligible. The drawback follows the inputs that end up in, or are consumed making, the exported product, not the equipment that makes it.

Where the imported inputs were mixed with similar goods produced in Australia before manufacture or processing, section 41 provides that the amount payable is one a Collector considers fair and reasonable, having regard to the duty paid on the imported goods in the mix, the quantity lost, wasted or used otherwise, and any drawback already paid on earlier exports from the same mixture.

When Drawback Is Not Payable

The regulation and the ABF set out several situations where no drawback is payable:

• Low export value. Drawback on goods exported unused is not payable if the free on board (FOB) price at the time of export is not more than 25% of the customs value of the goods determined at import.
• Duty already refunded. If the import duty paid on the goods has been refunded, no drawback is payable.
• No records. If records are not available for examination by an officer showing that import duty was paid and the details of the receipt and disposal of the goods.
• Goods used in Australia. Apart from inspection or exhibition, or use as materials in manufacturing or processing goods for export.

What Can Be Recovered: Duty, Including Dumping Duty, but Not GST

Drawback refunds import duty. Section 33 of the regulation states that, for Part 7, a reference to import duty includes dumping duty, interim dumping duty, countervailing duty and interim countervailing duty that has been paid on the imported goods. For goods caught by anti-dumping measures, that can be the largest component of a claim.

GST is a different matter. The ABF is explicit that you cannot claim a refund of GST in a duty drawback claim. Importers registered with the Australian Taxation Office (ATO) for GST may be entitled to an input tax credit on creditable importations, claimed through the Business Activity Statement (BAS). Drawback of excise duty is also handled by the ATO rather than the ABF, so excisable goods follow a separate process.

Tobacco and Tobacco Products

Tobacco carries extra conditions. The claim must be lodged within 12 months after export, and the owner must give the ABF written notice of the intention to claim before export; the ABF asks for this at least 5 business days ahead to allow time for examination. The claim must also state that the goods have not been, and are not intended to be, re-landed in Australia.

How to Claim Duty Drawback, Step by Step

Most of the work behind a successful claim happens before lodgement, in the evidence captured at import, during storage or processing, and at export.

Time limit to watch: under section 37 of the regulation, the legal owner at export must lodge the claim in the period starting on the day the goods are exported and ending 4 years after that day (12 months for tobacco and tobacco products). The clock runs from export, not from import.

Step 1: Confirm Eligibility

For each flow of goods, work through Part 7's questions. Was import duty paid and not refunded? Were the goods used in Australia only for inspection, exhibition, or as inputs to exported goods? Will the FOB export price exceed 25% of the customs value at import? Is the claimant the legal owner at export?

Step 2: Locate the Import Declaration

The ABF states that to lodge a claim you will need access to the Import Declaration used to enter the goods into Australia, or the information it contains. Where goods have been imported more than once, section 39 provides that the duty for which drawback is payable is the duty paid on the importation last preceding the export. Pull the declaration identifier, the relevant line numbers, the tariff classification, the customs value and the duty paid for each line, because the claim is built line by line.

Step 3: Make the Goods Available Before Export

Section 37 requires that, before exportation, the goods are available at all reasonable times for examination by an officer. For tobacco, it also means lodging the pre-export notice described above.

Step 4: Enter the Goods for Export

As evidence of export, the ABF requires a valid export declaration for each line of a drawback claim. Make sure the export declaration describes the goods clearly enough to be matched to the import declaration lines, and that quantities agree with your stock and shipping records. A consignment described as "general cargo" will not tie back to a specific import line.

Step 5: Choose a Calculation Method

Drawback claims are based on self-assessment. The ABF lists three calculation methods:

• Shipment by shipment basis: for use where imports directly relate to exports.
• Representative or averaging shipment basis: generally used for high volume, low value goods. A representative shipment for a period is selected as a typical sample of the values of identical items, or values are averaged over time, and the result must not produce an over-claim.
• Imputation method: for use where the exporter was not the importer and does not know the precise amount of duty paid. The import value is imputed at 30% of the purchase price, and the method can only be used where goods are fully imported and were purchased in Australia by the exporter.

Whichever method you use, the claim must not exceed the amount of duty paid when the goods were imported.

Step 6: Lodge the Claim in the ICS or on Form B807

The ABF accepts claims lodged electronically through the drawback claim functionality in the Integrated Cargo System (ICS), or manually on the "Claim for Drawback" form (B807), which can be emailed to the ABF's drawbacks mailbox. The ABF's ICS drawback user manual notes that claims may be created by registered claimants or by customs brokers acting on their behalf, and walks through each claim line, including the related import declaration identifier and line number and the export declaration number.

Every claim must include a statement that, to the best of the claimant's knowledge, information and belief, the goods have not been used in Australia other than for inspection or exhibition. You must also provide banking details, because the ABF pays drawback by Electronic Funds Transfer (EFT).

Step 7: Meet the A$100 Minimum

Under section 37, each claim must be for at least A$100, or be lodged at the same time and in the same approved form as other claims by the owner so that together they reach A$100. Batch small amounts.

Step 8: Keep the Evidence Ready

You are not required to submit specific documents with the claim unless the ABF asks for them, but you must have the evidence and provide it if requested. The ABF will not approve a claim where the claimant cannot substantiate that the goods were imported, import duty was paid and the goods were exported. Its Australian Customs Notice 2023/45 sets out the evidentiary requirements, including for claims using the imputation method.

Calculating Your Duty Drawback Claim: Three Worked Examples

The hypothetical examples below show how the rules interact. Duty rates and values are illustrative only, so use the actual figures from your Import Declarations and the current tariff. Each example assumes the goods were available for examination before export, a valid export declaration was lodged, and the claim is lodged within 4 years of export.

The ceiling is the same in every case: section 40 of the regulation states that the amount claimed must not exceed the import duty paid on the goods (or, for manufactured or processed goods, on the imported goods used to produce them). Part 7 does not apply a fixed percentage deduction. The claim is the duty attributable to the exported goods, up to the duty actually paid, reduced only by any rebate of import duty already made under Part 7 (section 42).

Example 1: Unused Goods, Shipment by Shipment

A distributor imports 2,000 units with a customs value of A$75 each (A$150,000). At an illustrative duty rate of 5%, it pays A$7,500 in duty, or A$3.75 per unit. Over the next year, 800 of those units are exported unused to a customer in Singapore, at an FOB price of A$110 each.

• FOB check: 25% of the A$75 customs value is A$18.75, and A$110 is well above it.
• Duty attributable to the exported units: 800 × A$3.75 = A$3,000
• Claim: A$3,000, which does not exceed the duty paid

Because the import declaration lines relate directly to the export, the shipment by shipment basis fits.

Example 2: The 25% FOB Rule on Clearance Stock

A retailer imports 500 units of a seasonal line with a customs value of A$40 each, paying illustrative duty of 5%, or A$2 per unit (A$1,000 in total). Sales are poor, and it agrees to sell the remaining stock to an overseas buyer at A$9 per unit FOB.

• 25% of the A$40 customs value is A$10
• An FOB price of A$9 is not more than 25% of the customs value, so drawback is not payable

If the retailer negotiated A$12 per unit FOB instead, the goods would clear the threshold and the claim would be 500 × A$2 = A$1,000. The export price can decide whether there is a claim at all, so check it before the sale is agreed.

Example 3: Imputation on Locally Purchased Goods

An exporter buys fully imported goods from an Australian wholesaler for A$60,000 and exports them unused. It does not know the duty the wholesaler paid, and the goods carry an illustrative ad valorem duty rate of 5%.

• Imputed import value: 30% × A$60,000 = A$18,000
• Imputed duty: A$18,000 × 5% = A$900
• Claim: A$900, provided records show duty was in fact paid on the goods and not refunded

Customs Notice 2023/45 says the claimant should first get written confirmation from its supplier that the supplier imported the goods and paid the duty. If the documents do not identify the actual duty rate, the ABF will use the rate in effect six months before the local purchase, so keep the supplier's invoice.

The Records Trail That Makes or Breaks a Claim

The ABF administers the scheme on self-assessment and expects claimants to produce, on request, sufficient evidence to substantiate the claim. That means a path from import declaration to export declaration, with quantities that reconcile at every step.

What Section 37 Requires You to Be Able to Show

Section 37 requires two kinds of records to be available at all reasonable times for examination by an officer:

• Records showing that import duty has been paid on the goods, which in practice means the Import Declaration and the duty payment.
• Records showing relevant details of the receipt and disposal of the goods by the owner, which means what was received, where it went, what happened to it and how it left the country.

Following One Import From Entry to Export

Here is the evidence the ABF may look for as a single consignment moves through a typical operation:

• Import: the Import Declaration identifier and line numbers, tariff classification, customs value, duty paid (including any dumping duty) and import date.
• Receipt: the date received, quantity counted and a link back to the import declaration and the purchase order.
• Storage, processing or sale: stock movements and adjustments, any manufacture or processing with the quantities of imported inputs used, lost or wasted, and each sale of the goods within Australia.
• Export: the export declaration for each line, the transport document, the export date, destination and FOB price.
• Claim: the calculation method used, the claim lines and the reconciliation behind them.

Each stage is a point where a manual spreadsheet can break the chain.

Linking Import Declaration Lines to Export Lines

Customs data (declaration lines, classifications, duty paid) usually sits with the broker, while stock and dispatch data sit in the owner's systems. Drawback needs the two joined. Record the import declaration reference against the goods on arrival and carry it through every move, sale and dispatch, so export lines can be matched without reconstruction.

Record Retention: How Long to Keep Drawback Evidence

The ABF requires you to keep all documentation for a minimum of 5 years from the date the goods are exported. Because you can lodge a claim up to 4 years after export, a claim lodged late in that window still needs its full evidence a year later. Keep system transaction history as well as PDFs, since an officer may want to see how a quantity was arrived at.

Where Customs Software Fits

Customs software sits at the point where these records meet. A broker's system already holds the Import Declaration lines and the export declarations, so it is the natural place to tie a drawback claim to both, rather than rebuilding the link in a separate spreadsheet each time a client exports.

Expedient's customs clearance features are designed to track and manage Australian customs duty drawback claims inside the same system that handles the original import declaration, keeping the paperwork trail intact. For brokerages, the customs brokers page explains how drawback processing for eligible re-exports draws on the import and export records already captured in the platform. When you assess any system, test it against the evidence list above: can it show, for any claim line, the import declaration line, the duty paid and the export declaration behind it?

Alternatives, Brokers and Mistakes to Avoid

The practical questions come next: should a broker lodge the claim, can the duty be avoided up front, and what goes wrong most often?

Lodging With or Without a Licensed Customs Broker

Registered claimants can lodge their own drawback claims in the ICS, and the ABF's ICS manual notes that customs brokers can create claims on a claimant's behalf. Many exporters use their broker, particularly where the broker lodged the original Import Declarations and already holds the line-level data.

What a broker cannot do is invent evidence. The claim is self-assessed, and no lodgement expertise will repair a missing link between an import declaration line and the export it supports. For forwarders handling both directions of a client's freight, the data the claim needs is often already in their own records. Drawback here is an Australian scheme; our guide to AU vs NZ customs clearance covers how the two regimes differ more broadly.

Tradex: an Up-Front Exemption Instead of a Refund

The ABF describes the Tradex Scheme as providing an up-front exemption from customs duty and GST on imported goods intended for re-export or to be used as inputs to exported goods, removing the need to claim drawback after export. The scheme is administered by the Department of Industry, Science and Resources, and its Tradex Scheme page sets out the conditions:

• You must hold a Tradex order before the goods are imported. An order cannot be used on imports already received.
• The nominated goods must be exported within 12 months of entry into Australia, unless an extension has been approved.
• Goods that would attract excise if produced in Australia, such as most alcohol, tobacco and many petroleum products, and goods for duty-free shops, are not eligible.
• You need record-keeping and accounting systems that track the nominated goods from import until export.

Tradex suits predictable re-export flows where the cash flow benefit of not paying duty and GST up front is worth the record-keeping commitment. Drawback remains the remedy for goods on which duty was paid and that later turn out to be exported.

Customs Warehouses and Tariff Concessions

The ABF's page on concession schemes for importing goods lists other options that work at the front end. Licensed customs warehouses let owners store imported goods underbond, without paying duty, until they are entered for home consumption, and goods stored there may be exported without incurring duty liability. Tariff Concession Orders (TCOs) allow concessional entry of imported goods where there are no known Australian manufacturers of the same goods. Where duty is never paid, there is nothing to draw back, so the choice between these schemes and drawback is worth making deliberately for each flow of goods.

Common Duty Drawback Mistakes: An Inline Checklist

• Leaving drawback until after export instead of capturing the import declaration reference at receipt
• Counting the 4-year window from import rather than from export
• Assuming dumping or countervailing duty cannot be recovered, when Part 7 treats it as import duty
• Trying to recover GST through the drawback claim
• Agreeing an export price at or below 25% of the customs value without checking the effect on drawback
• Using imported goods in the business before export, turning them into second-hand goods
• Buying imported stock locally without arranging evidence of the supplier's import and duty payment
• Lodging many separate claims below A$100 instead of combining them
• Deleting records before 5 years from export have passed

Compliance Disclaimer

This article offers general information about the Australian duty drawback scheme. It is not legal or customs advice. Legislation, tariff rates and ABF procedures change, so check current requirements on the ABF website, in the Customs Act 1901 and the Customs (International Obligations) Regulation 2015, or with a licensed customs broker before you lodge a claim.

Frequently Asked Questions