Drawback on Destroyed Goods: Recovering Duty on Inventory You Scrap

Imported goods that are destroyed under CBP supervision qualify for drawback the same way exported goods do. Expired product, obsolete inventory, damaged stock and recalled goods can all earn back up to 99% of the duty paid on them, as long as the destruction is properly noticed and documented. Many importers write this inventory off without ever recovering the duty.

How destruction drawback works

Unused merchandise drawback under 19 U.S.C. 1313(j) and rejected merchandise drawback under 1313(c) both cover destruction as well as export. The goods have to be destroyed within the five-year window, under CBP supervision, so they no longer have commercial value.

The notice

Without a waiver, the claimant files a notice of intent to destroy, CBP Form 7553, at least 7 working days before the destruction. CBP decides whether to witness it. See our Form 7553 guide.

What counts as destroyed

• The goods lose their commercial value, through incineration, shredding, crushing or similar methods.
• Recovered material reduces the claim. If destruction yields scrap or material with value, the drawback is reduced by that value.
• Donations and resale do not count. Goods that leave intact are not destroyed.

The records

• The import entry for the goods.
• The notice and CBP's response.
• A certificate of destruction from the destruction vendor, with quantities, method and date.
• Inventory records tying the destroyed units to the designated imports.

Frequently asked questions

Can I combine destruction and export in one claim? Yes, a claim can cover both.

What about goods destroyed years ago without notice? They are hard to claim, because the notice and supervision are part of the proof.

How Caspian handles destruction claims

Caspian files the notices, coordinates with your destruction vendor and builds the claim. See our duty drawback services or the full duty drawback guide.

Works Cited:

• 19 U.S.C. 1313, Drawback and refunds
• 19 CFR 190.35, Notice of intent to export, destroy, or return