Drawback Claims and Customs Exemptions

Many importers and exporters treat customs duties and purchase tax payments as a "Sunk Cost." The reality is that in many cases, this money belongs to you, and it remains in the state's coffers solely due to lack of awareness or reluctance to deal with bureaucracy. Whether it involves goods imported for manufacturing and exported abroad (Drawback), defective merchandise returned to the supplier, or errors in tax calculations at the time of clearance — the state is holding millions of shekels belonging to the business sector. Failing to claim these funds is a direct blow to your cash flow and business profitability.

The Customs Ordinance recognizes the importer's right to receive a tax refund ("Drawback") in specific situations:

1. Import for Export: If you imported raw materials, processed them, and exported the finished product abroad, you are entitled to recover the customs duties paid on those raw materials.

2. Return of Goods Abroad: Goods that arrived defective or not conforming to the order and were returned to the supplier entitle the importer to a refund of the taxes paid on them (subject to proof of export).

3. Conditional Exemption: An option to release goods without paying taxes (in exchange for a guarantee), when it is known in advance that they are destined for export or temporary use. The challenge lies in maintaining an accurate "drawback account" and proving the direct link between the import and export to the satisfaction of Customs.

Our firm specializes in conducting "deep digs" into your import files to locate lost funds. We handle the entire drawback chain: from opening the case with the Drawback Unit, through proving the yield rate in the manufacturing process, to receiving the check from the state. Additionally, we represent importers who overpaid taxes due to classification or valuation errors, and file retroactive refund claims. For us, every customs entry is a potential check waiting to be cashed.