Drawback - Encyclopedia

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DRAWBACK, in commerce, the paying back of a duty previously paid upon the exportation of excisable articles or upon the re-exportation of foreign goods. The object of a drawback is to enable commodities which are subject to taxation to be exported and sold in a foreign country on the same terms as goods from countries where they are untaxed. It differs from a bounty in that the latter enables commodities to be sold abroad at less than their cost price; it may occur, however, under certain conditions that the giving of a drawback has an effect equivalent to that of a bounty, as in the case of the so-called sugar bounties in Germany (see Sugar). The earlier tariffs contained elaborate tables of the drawbacks allowed on the exportation or reexportation of commodities, but so far as the United Kingdom is concerned the system of "bonded warehouses" practically abolished drawbacks, as commodities can be warehoused (placed "in bond") until required for subsequent exportation.

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