CIT Rejects 'Double Drawback' Rule for Excise Taxes

The Court of International Trade issued a decision late on Jan. 24 finding recent CBP regulations limiting the amount of drawback that can be claimed on excise taxes were "unlawful." The court held that a final rule issued by CBP in December 2018 that aimed to prevent so-called “double drawback” contradicts the legal framework created by Congress for drawback.

The regulations, which limit the amount of drawback claimed to the taxes actually paid on the exported good upon which the claim is based, also run afoul of Congress’ apparent intent to expand drawback, the court said.

CIT gave the National Association of Manufacturers and the Beer Institute, plaintiffs in the case, until Feb. 7 to propose what form of judgment the court should order.