Duty drawback is a refund of import duty you already paid on goods that are later re-exported from Malaysia. Under the Customs Act 1967, a re-exporter can recover 90% of the duty (Section 93) and a manufacturer who re-exports imported inputs can recover the full 100% (Section 99) — provided the claim is filed within strict deadlines.
Last updated: 1 June 2026
Most Malaysian importers treat duty as a sunk cost. It often is not. If goods leave the country again — returned to a supplier, re-exported after storage, or shipped out as part of a finished product — the duty paid on import can frequently be reclaimed. This guide explains who qualifies, how much you can recover, the deadlines that catch people out, and exactly how the claim works at Port Klang.
What is duty drawback in Malaysia?
Duty drawback is a refund mechanism under the Customs Act 1967 that returns import duty paid on goods that are subsequently exported out of Malaysia. It exists so that duty is only borne by goods that actually stay and are consumed in the country — not by goods that merely pass through or are re-exported.
The facility is administered by the Royal Malaysian Customs Department (Jabatan Kastam Diraja Malaysia, JKDM). It matters more than ever because re-export volumes through Malaysia are large and growing: in October 2025, Malaysia imported RM129.3 billion of goods and re-exported RM39.1 billion — equal to 26.4% of total exports that month, according to the Department of Statistics Malaysia. A meaningful share of the duty paid on those imports is, in principle, recoverable.
There are two main routes, and which one applies to you decides how much you get back and how long you have to claim it.
Who can claim a duty drawback — re-exporter or manufacturer?
Two groups can claim. A trader who imports goods and re-exports them in essentially the same state claims under Section 93. A manufacturer who imports raw materials or packing, uses them to make a product, and exports that product claims under Section 99. The route determines the refund rate and the deadline.
The distinction is fundamental, so it is worth being precise about it:
Section 93 vs Section 99 — which applies to you
- Section 93 (re-export of goods): For goods on which duty was paid at import and which are then re-exported without being used in Malaysia. Think of returned stock, transhipment cargo cleared into the country, or unsold imported goods shipped onward. The refund is nine-tenths (90%) of the duty paid.
- Section 99 (drawback on goods used in manufacture): For imported materials, parts, or packing that a manufacturer incorporates into a product that is then exported. The refund is the full duty paid (100%), because the input never stays in the domestic market.
According to a summary of the Act by Malaysian law firm Low & Partners, Section 99 also extends to the person to whom the manufactured goods were sold or disposed of — not only the manufacturer themselves — and the Director General may even allow a drawback on dutiable waste or refuse from the manufacturing process where the quantity can be proven.
How much import duty can you actually get back?
Under Section 93 you recover 90% of the import duty paid, calculated at the lower of the rate paid on import or the rate in force at re-export. Under Section 99 a manufacturer recovers 100% of the duty on imported inputs used in the exported product. Sales tax and excise duty have separate drawback rules.
The amounts are not trivial. Import duty rates vary widely by tariff code, and that is before sales tax and other charges are added. On a container of dutiable goods, a 90% or 100% drawback can return tens of thousands of ringgit that would otherwise be written off entirely.
The duty is only refundable if you claim it. Customs can later recover duty that was underpaid, but it will not proactively tell you when you have overpaid or when goods you re-exported were eligible for a drawback. The onus is entirely on the importer.
What are the deadlines and the minimum claim?
Deadlines are short and are the single most common reason drawbacks are lost. For a Section 93 re-export claim, the goods must be re-exported within 3 months of paying the duty, and the minimum claim is RM200. The amounts and the re-export window were tightened by the Customs (Amendment) Act 2019.
The 2019 amendment cut the Section 93 re-export window from 12 months to 3 months and raised the minimum claim from RM50 to RM200, as reported by Baker McKenzie's Global Compliance News. The same amendment gave Customs the power to offset any drawback or refund due to you against other duties and taxes you owe. The key conditions are summarised below.
| Condition | Section 93 (re-export) | Section 99 (manufacture) |
|---|---|---|
| Refund of duty paid | 90% (nine-tenths) |
100% (full) |
| Re-export window from duty payment | Within 3 months | Within 12 months |
| Minimum claim | RM200 | Set by the Director General |
| Deadline to establish the claim | Within 3 months of re-export | Within 6 months of re-export |
| State of the goods | Not used after importation | Used as an input or packing in the export |
The Section 93 and Section 99 conditions, refund rates, and the six-month establishment window for manufacturers are set out in the Act as summarised by Low & Partners. Always confirm the current figures with JKDM or your forwarder before you plan a claim, because thresholds and windows are amended periodically.
How do you claim a duty drawback, step by step?
You give written notice of the drawback claim at or before re-export, declare the export on the prescribed customs form, let a customs officer identify the goods, and then establish the claim with supporting documents within the statutory window. Manufacturers must also export from premises approved by the Director General.
In practice the process at Port Klang looks like this:
- Keep the original import documents. You need the import declaration and proof that duty was actually paid — the claim is calculated from the duty on that specific consignment.
- Give written notice of the claim. For a Section 93 claim, written notice that you intend to claim drawback must be given at or before the time of re-export. Miss this and the claim can be refused even if everything else is in order.
- Declare the re-export correctly. The outbound shipment is declared on the prescribed JKDM export form; the goods and quantities must reconcile against the original import. (See our guide to the K1, K2, K8 and K9 customs forms.)
- Allow identification of the goods. A senior customs officer must be satisfied that the goods being re-exported are the same goods that were imported and that they were not used in Malaysia.
- Establish the claim within the deadline. Submit the claim with supporting evidence within 3 months of re-export for Section 93, or 6 months for Section 99.
For manufacturers, Section 99 adds two structural requirements: the manufacturing must take place on premises approved by the Director General, and you must keep records that let Customs verify the quantity of imported material used in each exported product. According to the Ministry of Investment, Trade and Industry (MITI), the Section 99 duty drawback facility is one of several mechanisms available to exporting manufacturers, alongside import-duty exemptions.
Drawback vs LMW, FTZ and exemptions — which is better?
Drawback refunds duty after you have paid it and exported. A Licensed Manufacturing Warehouse (LMW), Free Zone, or duty exemption avoids paying the duty in the first place. For a regular, high-volume export manufacturer, not paying is almost always better than claiming back; drawback suits occasional or unplanned re-exports.
The trade-off is cash flow and administration. Drawback ties up your money between import and refund and depends on you meeting every deadline. A bonded facility, Free Zone or LMW lets qualifying manufacturers bring in inputs without paying duty up front, which is structurally cheaper if export is your steady business model. One important limit: goods that were already imported under an exemption cannot then also claim a Section 99 drawback — you cannot recover duty you never paid.
Quick rule of thumb
- Occasional re-export of dutiable goods: use duty drawback (Section 93).
- You manufacture for export regularly: evaluate an LMW or Free Zone so you never pay the duty — with Section 99 drawback as the fallback for shipments that fall outside the scheme.
- Returned or rejected imports: Section 93 drawback, provided you act inside the 3-month window.
Why duty drawback claims get rejected
Most rejected drawbacks fail on timing or paperwork, not eligibility. Missing the 3-month re-export window, failing to give written notice before re-export, weak proof that the goods are the same ones imported, claims under the RM200 minimum, or goods that were used in Malaysia are the usual reasons a valid claim is lost.
The recurring failure points we see are:
- Deadline missed. The Section 93 window is only 3 months from duty payment. Plan the re-export and the claim from day one, not after the goods have already left.
- No prior written notice. For Section 93 the intention to claim must be declared at or before re-export — you cannot decide to claim months later.
- Goods cannot be identified. If a customs officer cannot match the re-exported goods to the original import, the claim fails. Serial numbers, marks, and consistent descriptions matter.
- Goods were used. Section 93 requires the goods to be unused after import; using them in Malaysia disqualifies the as-is re-export drawback.
- Below the minimum. Claims under RM200 are not entertained under the amended Section 93.
How DNE Forwarding helps you recover import duty
At DNE Forwarding, duty recovery is part of our customs clearance work, not an afterthought. As a JKDM-licensed forwarder handling over 1,000 containers a month through Port Klang, we see eligible drawbacks slip away simply because no one flagged them in time. Our team:
- Screens for eligibility early. When a shipment is likely to be re-exported, we identify the Section 93 or Section 99 route at import — before the clock starts — so the deadline never quietly expires.
- Files the notice and the claim correctly. We give the required written notice at re-export, declare the export on the right form, and establish the claim with the supporting documents JKDM expects.
- Advises on the better structure. If you re-export regularly, we will tell you honestly when an LMW or Free Zone would beat repeated drawback claims.
With more than 25 years clearing cargo at Port Klang and a documentation compliance rate above 99%, we keep claims clean enough to survive a customs review — which is where rushed, in-house drawback attempts usually come apart.
Frequently asked questions
Can I claim back import duty if I return goods to my overseas supplier?
Yes. If you paid import duty and then re-export the goods unused — for example, returning faulty or wrong stock to the supplier — you can claim a Section 93 drawback of 90% of the duty, provided you re-export within 3 months of paying the duty, give written notice at re-export, and the claim is at least RM200.
Is duty drawback the same as a sales tax refund?
No. Duty drawback under Sections 93 and 99 of the Customs Act 1967 refunds import (customs) duty. Sales tax and excise duty have their own separate drawback and refund provisions with different conditions. A single re-exported shipment may involve more than one type of claim, which is why the paperwork is handled together.
How long does a duty drawback take to be paid?
There is no fixed statutory payout timeline; it depends on JKDM processing and how complete your claim is. What you can control is the deadline to file: 3 months from re-export for Section 93 and 6 months for Section 99. Clean, well-documented claims that reconcile against the original import move faster.
Do I need to pay duty first to claim a drawback?
Yes — drawback refunds duty you have already paid. If you import regularly for export, it is usually better to avoid paying the duty at all through a Licensed Manufacturing Warehouse or Free Zone. Goods imported under an exemption cannot claim a Section 99 drawback, since no duty was paid.
Sources
- Department of Statistics Malaysia — Monthly External Trade Statistics, October 2025
- Global Compliance News (Baker McKenzie) — Revamp of the Customs Act 1967 Affecting Businesses
- Low & Partners — Customs Act 1967 (Part 2): drawback provisions
- MITI — Duty Drawback Under Section 99 of the Customs Act 1967
- Royal Malaysian Customs Department (JKDM)