Proper MPF Calculation on Drawback Claims
Customs Duty Drawback program allows for the refund of import duties, taxes and fees that were paid to Customs at the time of importation when the goods were later exported or destroyed. Claiming duty drawback is a great way to offset the expense of import taxes and improve your company’s bottom line. However, ensuring your drawback entry filings are compliant is crucial for a successful duty refund program.
Customs Regulations & Rulings recently decided how Merchandise Processing Fees (MPF) are to be calculated for certain drawback claims. Pursuant to Ruling H332753, Direct Identification and Substitution drawback claims require MPF to be calculated and apportioned at the entry summary line level.
Ruling H332753 excerpt:
“In conclusion, 19 C.F.R. § 190.51(b)(2) requires drawback claimants to calculate and apportion MPFs at the entry summary line level, whether the claim is direct identification or substitution. As discussed above, CBP has the authority to require the apportioning of MPFs at the entry summary line level and that apportionment is necessary to ensure that MPFs are not over-refunded. The MPF apportionment calculation regulations also set MPF calculations apart from the calculation of all other fees. Finally, although the MPF regulations only refer to “line item,” CBP has been consistent throughout its regulations to use the term “line item” when referencing the entry summary line. For all these reasons, MPFs are to be calculated and apportioned at the entry summary line level whether the drawback claim is based upon direct identification or substitution.
HOLDING:
Based on the above discussion, MPFs are to be calculated and apportioned at the entry summary line level whether the drawback claim is based upon direct identification or substitution.”