chapter  XIV
DRAWBACK
Pages 15

DRAWBACK means the repayment of duty when a duty-paid article is deposited in a bonded warehouse or exported either as merchandise or as ships' stores. This method of relief enables a merchant to gain full control over his goods and still retain an option to sell them in the export market without the loss of the duty. The scope of the drawback system is strictly limited to specified articles, and in each case there is a condition regarding manufacturing processes after duty is paid. If the goods must be exported in the same condition as they were when the duty was paid, the drawback system can be regarded as an alternative to storing in a bonded warehouse. If, however, a further manufacturing process is insisted upon, then drawback methods are alternative to manufacturing in bond. The drawback system as a whole is extremely complicated and very difficult to administer. Every extension of the drawback field involves many problems, both in the administration of the proposed extension, and in its repercussions on other parts of the tariff. Questions of definition and classification are apt to crop up in the same way as they do with import duties. In a composite article different rates of duty may have been paid on different ingredients.