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Drawback Program - Claiming a drawback on exported goods

In this context, a drawback is a refund of customs duties on imported goods that you eventually export. You can export goods in the same condition they were imported, or before export, you can further manufacture or use them in a limited manner without affecting the refund amount.

Goods may be imported and exported or subject to a full range of manufacturing processes in Canada. The Drawback Program provides for drawbacks on consumable and expendable goods used in production processes, as well as scrap materials. In addition, the Program allows for the assignment of rights to claim a drawback using a waiver system. Through the Program, an exporter can claim a drawback on imported goods that were sourced from a supplier in the domestic market.

Qualifying for a drawback

If you are the importer, exporter, processor, owner or producer of the goods, you may qualify for a drawback if one of the following applies:

  • you are directly or indirectly involved in importing goods that are later exported in the same condition they were imported; or
  • you further manufacture or use imported goods in a limited manner to produce other goods for export.

Example: A manufacturer imports chocolate to make candy bars for sale in Canada and then develops an export market and sells some of those candy bars abroad. The Drawback Program enables the manufacturer to claim a refund of the duties and taxes paid on the imported chocolate used to make the exported candy bars.

Keep in mind that if you are a producer of goods that are exported to the United States or Mexico, you may be subject to restrictions under the North American Free Trade Agreement (NAFTA). See Memorandum D7-4-3, NAFTA Requirements for Drawback and Duty Deferral , for more information.

When more than one person is eligible to file a drawback claim, waivers must be submitted by the other eligible claimants before the Canada Border Services Agency (CBSA) can process your claim.

Claiming a drawback

To claim a drawback, complete Form K32, Drawback Claim. Attach documents establishing that the goods qualify and send the package to your local CBSA office.

Time limits

In most cases, you have to present a claim no later than four years after you import the goods. You cannot file a claim until you have exported the imported goods.

Payment and compliance

The CBSA often fully or partially refunds properly prepared and supported claims shortly after you file them. When the Agency partially refunds claims, it pays the balance owing after verifying the claim. When the Agency does not fully refund a claim within 90 days of you filing it, it will pay interest on the outstanding balance.

More information

For more information on the Drawback Program or for help preparing your claim, contact your local CBSA office.

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