Applying Individual Duty Drawback Retroactively for First-Time Applicants with No Prior History Released

Summary of Eligibility

If you have received approval for the Non-application of Simplified Fixed Drawback for the first time and have no prior history of customs duty refunds, you are eligible to apply for an individual drawback for goods that were exported even before the approval date.

Legal Basis and the Exception Clause

This provision is clearly defined in the proviso of Article 14, Paragraph 7 of the Special Act on the Refund of Customs Duties, etc. for Exported Raw Materials (the "Refund Special Act"). Generally, when a company is approved for the non-application of the Simplified Fixed Drawback Rate, that approval applies only to goods exported or supplied under local letters of credit after the approval date. However, the law provides a specific exception for new applicants.

• General Rule: Simplified Fixed Drawback rates normally apply to all exports made prior to the non-application approval date.
• The Exception: For entities that have never received a customs refund and are receiving their first non-application approval, the individual drawback method can be applied to goods exported before the approval date. (Note: Refunds for goods exported in their original state under Article 3, Paragraph 1, Item 2 are excluded from this history check).

Purpose of the Regulation

The exclusion of 'original state exports' from the refund history is because those refunds apply to goods re-exported without processing, which differs in nature from manufacturing-based refunds. This legislative exception is intended to prevent a "refund gap" or potential financial disadvantage for companies transitioning to or starting with the individual drawback system for the first time.

Individual Drawback vs. Simplified Fixed Drawback

The Individual Drawback method calculates the actual duties paid on the specific raw materials used to manufacture the exported goods. While the calculation is more complex and requires more documentation than the Simplified Fixed Drawback, it offers a distinct advantage: if the raw materials have high duty rates or high import values, the refund amount can be significantly higher than the amount calculated using the Simplified Fixed Drawback Rate Table.

Required Documentation and Professional Advice

When applying for an individual drawback retroactively for exports made prior to the approval date, the accuracy and completeness of your evidence are critical. You must prepare the following:

• Import Declaration Certificates for the raw materials used.
• Bill of Materials (BOM) or Consumption Level Calculations.
• Manufacturing Flowcharts and production records.
• Relevant accounting ledgers for purchasing and production.

Because retroactive individual drawback applications are subject to strict scrutiny, we recommend consulting with a Licensed Customs Broker to ensure precise calculation and a smooth application process.