BOC calls attention of companies with duty drawback claims

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BOC calls attention of companies with duty drawback claims
  • The Bureau of Customs called the attention of companies with pending duty drawback claims
  • The companies were asked to confirm their pending applications with the Tax Credit Committee (TCC) secretariat
  • The notice was issued in view of the recent issuance of Customs Memorandum Order No. 16-2023, which provides new procedures for processing, approval, and payment of duty drawback claims

The Bureau of Customs (BOC) notified 33 companies with pending duty drawback claims and asked them to confirm their pending applications with the Tax Credit Committee (TCC) secretariat.

The notice comes in response to the recent release of Customs Memorandum Order (CMO) No. 16-2023, which outlines new procedures for processing, approval, and payment of duty drawback claims.

READ: BOC releases guidelines for duty drawback claims

In Customs Memorandum Circular (CMC) No. 181-2023 dated October 23, TCC chairman and deputy commissioner Edward James Dy Buco identified the 33 companies with pending duty drawback claims. The order said the companies should confirm their applications through email to the TCC secretariat and visit the BOC Revenue Accounting Division at Port Area, Manila within 60 days of receiving the notice to check status of their application.

The list includes, among others, JG Summit Petrochemical Corp., Noritake Porcelana Mfg. Corp., Petron Corp., Republic Chemicals, Inc., and Wyeth Philippines, Inc.

Duty drawback refers to refunds or credits for import duties and possibly internal revenue taxes that were genuinely paid.

CMO 16-2023, which took effect on November 1, covers claims under the Customs Modernization and Tariff Act (CMTA) as well as those previously submitted to the Department of Finance’s One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center.

The order allows importers to apply for a duty drawback of up to 99% of legally imposed duty for fuel used in international trade sea vessels, coastwise trade vessels temporarily converted for international trade, and fuel used by scheduled international airlines.

A refund of up to 50% of the legally imposed duty is also available for petroleum oils, oils from bituminous materials, and crude oil imported by non-electric utilities sold to electric utilities.

Importers can also seek duty drawbacks for materials and articles used in exportable goods’ packing, packaging, and more, provided specific conditions are met.

However, CMO 16-2023 clarifies registered enterprises that have previously applied for tax credits based on customs duties paid on imported raw materials and supplies under RA 5186 or RA 6135 will not be eligible for duty drawback for the same imports later processed and re-exported.

To initiate the claims process, claimants must pay a processing fee, which varies from P700 to P5,000 depending on the claim’s amount, and submit complete documents to the BOC.

Approved duty drawback claims will be issued in the form of Tax Credit Certificates, valid for five years. These certificates can be revalidated for an additional five years, unless stated otherwise in the General Appropriations Act.

CMO 16-2023 follows Customs Administrative Order 04-2019, which outlines procedures for duty drawback, refund for overpayment, abatement of duties and taxes, and other refunds under the CMTA.