September 24, 2026

Duty Drawback: Getting Back the Duty You Paid on Exported Inputs

Workers at sewing machines on a garment factory production line, representing export manufacturing that uses imported inputs

Our guide to importing under bond describes the arrangement where an exporter never pays duty on imported inputs at all. This article is about the other route: you paid the duty at import, you exported the finished goods, and now you want the money back.

That refund exists. It is called duty drawback, and the reason many exporters never collect it is not that claims get refused. It is that the window closes.

What drawback is

Exports from Bangladesh are zero rated, with limited exceptions. The principle behind that is straightforward: an exported product should not carry domestic taxes into a foreign market.

So duties and taxes paid on the inputs and raw materials used to manufacture exported goods and services are refundable to the exporter after the export happens. The refund is administered by the Duty Exemption and Drawback Office, generally known as DEDO, which both pays drawback and issues the input-output coefficients that determine how much input your export is credited with consuming.

If that coefficient sounds familiar, it is the same logic as the utilisation declaration under the bond system. Both answer the question of how much raw material a given export order should reasonably have used.

Who can claim

Bangladesh Customs lists four categories of claimant:

Direct exporters, who ship the finished goods themselves
Deemed exporters, who supply an exporter locally and are paid in foreign exchange through the local letter of credit chain
EPZ exporters
Suppliers in deemed export cases

The inclusion of deemed exporters matters for accessory, packaging and component manufacturers. If you supply a garment exporter and paid duty on your own imported inputs, you are not automatically outside this system.

What comes back, and what does not

The refundable list is broader than most people assume. It covers customs duty, supplementary duty, value added tax, advance trade VAT, turnover tax, excise duty and regulatory duty.

Two exclusions are worth noting. Supplementary duty on gas and electricity is not refundable, and income tax is not refundable through this route.

The rule that decides your whole structure

Here is the provision that matters most, and it is easy to miss.

You cannot claim drawback on goods where you used the bond facility or took cash incentives. The routes are alternatives, not a menu to combine.

That turns drawback from a back-office reclaim into a structural decision you make before importing. A factory with a bond licence has already chosen suspension over refund. A factory without one, or with inputs outside its bond entitlement, is in drawback territory. An exporter taking a cash incentive on a shipment has chosen a third path for those goods.

Work out which route applies to which goods before the inputs arrive, not after the export is shipped.

Two ways the amount is calculated

Drawback is paid either at a flat rate or on an actual, case-by-case basis.

Flat rates are set for specified items through orders published in the official gazette. Where your product is covered, the calculation is simpler and the documentation lighter, because the rate per unit is already determined.

Where no flat rate applies, the claim is assessed on actual duties paid against actual inputs consumed, which means your import documents, consumption records and export documents all have to reconcile. This is where a claim succeeds or fails, and it is decided by record keeping you did months earlier.

The six-month clock

This is the single most important operational fact in this article.

A drawback application is made to the Director General of DEDO, on the prescribed application form, within six months from the date of export.

Six months sounds generous until you consider how the work actually happens: the export ships, the shipment is invoiced, the buyer pays, the accounts team moves on, and the claim is something somebody will get to. A claim assembled in month seven is worth nothing at all.

The practical fix is unglamorous. Put the deadline in a calendar at the moment of export, not at the moment someone remembers.

The documents are the claim

DEDO has published an item-wise list of required documents through a general order, and claims are expected to be submitted in the specified order rather than as a bundle.

In practice that means keeping a clean chain across three stages:

Import: the bill of entry and the duty payment evidence for the inputs
Consumption: records showing those inputs went into the exported product, consistent with the input-output coefficient
Export: the export documents evidencing the goods actually left

Consistency across that chain is the whole game, and it depends on documents created long before the claim. If your commercial invoice and packing list describe the imported inputs loosely, the reconciliation at claim stage is harder than it needed to be.

A caution about the references you will read

Published guidance on drawback, including official pages, cites its legal basis as section 13 of the Value Added Tax Act 1991, rule 30 of the VAT Rules 1991, sections 37 and 39 of the Customs Act 1969, and a DEDO general order from 2009. The application form is described as Mushak-22.

Two of those statutes have since been replaced. The VAT and Supplementary Duty Act 2012 came into force in July 2019, replacing the 1991 Act and renumbering the Mushak forms, and the Customs Act 2023 replaced the Customs Act 1969 with effect from June 2024, as noted in our guide to how customs values your goods.

The drawback facility itself continues. But before you file, confirm the current form number and the current statutory references with DEDO or your C&F agent, rather than quoting a page that still points at repealed law.

What to do this week

Decide the route per product line: bond, drawback or incentive, and write down which applies
Check whether your item has a flat rate, because that materially changes the effort involved
Calendar the six-month deadline from each export date
Fix the record chain now, so the import, consumption and export documents reconcile without reconstruction
Ask DEDO what the current form and document list are, since the published guidance predates two statutory changes

If your inputs come from China, the duties in question are the ones set out in our guide to import duties and taxes, and recovering them changes your export costing materially.

Drawback rules, forms, rates and deadlines change and are applied case by case. Confirm the current position with DEDO before relying on anything here for a filing decision.

Ready to ship? Explore our sea freight, air freight, sourcing, and customs clearance services from China to Bangladesh.

Get a Sourcing & Shipping Quote ← All posts