Refunds and drawbacks

A refund is when Customs repay some or all of the duty and/or GST back to the payee and can be applied for when:

• Duty and/or GST is paid in error
• There is a change between provisional Customs values paid and the final value
• There is a duty concession available for the goods you have imported which hasn’t been applied
• Something has happened to your imported goods before they have been released from Customs control which means you cannot use the goods for their intended purpose.
• Conditions apply- private individuals should contact service.delivery@customs.govt.nz to discuss how this provision applies to imported goods, businesses should contact your Customs Broker or see excise drawbacks and refunds for application to excisable goods

A drawback is a refund of import duty or GST that was paid on items you have imported and are now exporting, or have exported.

You can apply for a drawback of duty and/or GST for:

• items you’ve imported, and are now exporting
• Conditions apply- see private importers section below
• excisable items you’re exporting
• see information specific to excise drawbacks and refunds
• imported parts and materials used in, worked into or attached to items that are made in New Zealand and then exported
• imported materials – except fuel or plant equipment – used to make items in New Zealand that are then exported.

There are no minimum refund or drawback amounts for private individuals. The minimum refund or drawback for commercial clients is $50.

Who can apply for a refund or drawback?

Businesses

You can’t claim GST drawbacks if you’re GST-registered and you’re using the items for work.

Applying for a Refund

If you’re a business who has paid duty on imported goods and you believe one of the refund provisions applies to you, contact your Customs Broker to discuss how to apply for a refund.

Applying for a drawback

If you’re a business that regularly exports products that you have previously imported you may be eligible for a drawback of import duties paid on the items at the time they were imported.

To apply electronically for a drawback, your Customs Broker must:

• lodge the standard export entry
• specify the type as “drawback”
• include the item’s Customs import entry number
• include how much duty you paid and how much you are claiming and why
• provide all the relevant documents.

Timeframes

You should lodge your standard drawback entry 48 hours before the goods are shipped for export as sometimes Customs may need to inspect your goods to verify that the goods match the imported goods.

In some cases late and periodic drawback claims can be made independently of an export entry. The time limit for a late drawback entry is four years from the time of exportation.

Items you can’t claim drawbacks on

• Any fuel and plant equipment you use to make items which you’re going to export
• Waste material made by item(s) you imported to make other item(s) that you’re not exporting.

Private individuals

Drawbacks (refund of duty and /or GST paid on imported goods which are later exported) may be available to private importers (i.e. persons who have imported goods as an individual, not a business, and those goods are for their own personal use) under the following conditions

• Drawback of import duty paid on goods at the time of importation into New Zealand can be approved if evidence is provided that the same goods were later exported.
• The goods, when exported, must be in substantially the same condition as when they were first imported
• Drawback of GST paid on goods at the time of importation can only be approved if
• there is evidence that those same goods were later exported, and
• the goods were exported because
• they were faulty, or
• the goods supplied were not the same, or were of different specifications to the goods ordered.

Please note that the criteria for approving drawbacks of duty and GST are different. While drawbacks of duty can be approved if the goods are sent back, drawbacks of GST can only be approved if the goods were returned because they were faulty or delivered not to specification.

There are currently no legal provisions that allow Customs to approve a drawback of GST paid on imported items which have been re-exported because the importer changed their mind, or they didn’t like the item, or in the case of clothing and footwear the size they have ordered does not fit.

Customs is not responsible for refunding GST charged by a registered offshore supplier for goods valued at $1000 or less or if GST has been charged on goods over $1000 by that supplier. Offshore registered suppliers are required to refund any GST collected when a refund is made for goods that are returned to the supplier by the buyer.

Should GST be collected by both the offshore supplier and Customs (i.e. accidental double taxation), the offshore supplier is responsible for making a refund.

Applying for a refund or drawback

If you believe you may qualify for a refund or drawback of duty and/or GST, please email service.delivery@customs.govt.nz with “refund/drawback” in the subject heading line for further information about what is required for your application. Please include the Customs Import Entry Number or Waybill Number and an explanation of why you are applying for a refund or drawback. Further evidence to support your claim may be requested.

Valuation of replacement goods supplied free of charge

“Replacement goods” could be supplied to an importer free of charge if the goods originally supplied were:--

• faulty, and are under a guarantee or warranty; or
• incorrect; or
• damaged in transit.

It is important to note that for Customs valuation purposes, the replacement goods must be treated as a separate matter from the originally imported goods.

Notwithstanding that the replacement goods are provided “free of charge” to the importer, the replacement goods must be treated as a new import, and the importer will have to pay tariff duty (if any) and GST on entry of the goods.

As the goods have no transaction value, the Customs value of the goods must be determined by proceeding sequentially from Method 2 to Method 6 (transaction value of identical or similar goods, deductive value, computed value, residual basis of valuation), to the first such Method that the Customs value can be determined.

Depending on the situation, the Customs value of the replacement goods could be determined on the basis of the Customs value declared for the originally imported goods (applying the identical goods value method), or by reference to the latest list price of the goods (representing a sale for export to New Zealand).

If the importer can show that the originally (incorrectly or damaged) imported goods have been reexported overseas or have been destroyed under Customs supervision, the importer can claim a refund of tariff duty on those goods, but the refund application is considered as a separate matter.