Duty Relief Schemes Every Importer Should Know — India, UK, US, EU, Brazil, South Africa
Import duty is not fixed. Every major trading nation offers schemes that reduce, defer, or eliminate customs duties — if you know where to look and how to apply. Most importers leave money on the table because these schemes are buried in government circulars, require upfront paperwork, or simply are not publicised well enough.
This guide covers the most impactful duty relief schemes across six major markets. For each scheme, we explain what it does, who qualifies, and how much you can realistically save.
India
India has one of the most complex — but also most generous — duty relief frameworks in the world. The landed cost stack (BCD + SWS + IGST + Anti-Dumping) can push effective rates above 50% for some products, but several schemes can bring that close to zero.
Advance Authorisation
What it does: Exempts import duty on inputs used to manufacture export goods. You import raw materials duty-free, process them, and export the finished product.
Who qualifies: Manufacturer-exporters and merchant-exporters with an export obligation. You must export a specified quantity within 18 months (extendable).
How much you save: 100% of BCD, SWS, IGST, and Anti-Dumping on the imported inputs. For a chemical manufacturer importing intermediates at 7.5% BCD + 18% IGST, this saves approximately 27% of CIF value.
How to apply: File online at DGFT's portal (dgft.gov.in). Requires Standard Input-Output Norms (SION) or ad-hoc norms for your product.
EPCG Scheme (Export Promotion Capital Goods)
What it does: Allows import of capital goods (machinery, equipment) at 0% duty, in exchange for an export obligation of 6x the duty saved within 6 years.
Who qualifies: Any exporter — manufacturer or service provider. The capital goods must be used for producing export goods or services.
How much you save: On a CNC machine worth INR 1 crore with 7.5% BCD, you save INR 7.5 lakh upfront. But you must export INR 45 lakh worth of goods within 6 years.
RoDTEP (Remission of Duties and Taxes on Exported Products)
What it does: Refunds embedded central, state, and local taxes that are not otherwise rebated. Replaced the older MEIS scheme.
Who qualifies: All exporters of notified goods. The rates vary by HS code (typically 0.3% to 4.3% of FOB value).
How much you save: Check the RoDTEP schedule for your specific HS code. Issued as transferable duty credit scrips.
Bonded Warehouse / Bonded Manufacturing
What it does: Import goods without paying duty, store them in a bonded warehouse, and pay duty only when goods are cleared for domestic consumption. If re-exported, no duty is ever paid.
Who qualifies: Any importer with an approved bonded warehouse. The 2019 bonded manufacturing scheme (Section 65 of Customs Act) allows full manufacturing within the bonded zone.
India duty relief impact: An electronics manufacturer importing components under Advance Authorisation and machinery under EPCG can reduce their effective import duty from 28%+ to near zero — legally.
United Kingdom
Inward Processing Relief (IPR)
What it does: Suspends import duty and VAT on goods imported for processing and re-export. You import materials, process them in the UK, and export the finished product without paying duty on the inputs.
Who qualifies: Any UK business that processes imported goods for re-export. Requires an IPR authorisation from HMRC.
How much you save: 100% of duty and import VAT on the processed goods. For a food processor importing ingredients at 8% duty + 20% VAT, the saving is significant on high-volume goods.
How to apply: Apply via HMRC's Customs Declaration Service. Processing must be completed within a specified period (usually 12 months).
End-Use Relief
What it does: Reduces or eliminates duty on goods imported for a specific approved end use. Common for aircraft parts, ships' components, and certain industrial chemicals.
Who qualifies: Importers who can demonstrate the goods will be used for the approved purpose. Requires an End-Use authorisation.
Returned Goods Relief (RGR)
What it does: Exempts duty on goods that were originally exported from the UK and are being re-imported in the same state within 3 years.
Who qualifies: Any importer bringing back previously exported UK goods. Goods must not have been altered (beyond minor repairs).
| UK Scheme | Duty Saving | VAT Saving | Best For |
|---|---|---|---|
| Inward Processing Relief | 100% | 100% | Manufacturers re-exporting processed goods |
| End-Use Relief | Reduced or 0% | No | Aerospace, marine, industrial end users |
| Returned Goods Relief | 100% | 100% | Goods exported and returned within 3 years |
| Customs Warehousing | Deferred | Deferred | Distributors holding stock for re-export |
United States
Foreign Trade Zones (FTZ)
What it does: Goods in an FTZ are treated as outside US customs territory. You can store, assemble, manufacture, and re-export without paying duty. If goods enter the US market, you pay duty on either the imported components or the finished product — whichever rate is lower (inverted tariff benefit).
Who qualifies: Any company operating within an approved FTZ. There are 294 FTZs and over 500 subzones across the US.
How much you save: Eliminates duty on re-exported goods entirely. For domestic consumption, the inverted tariff rule can save 3-10% on assembled goods. Also defers duty payment until goods leave the zone.
Duty Drawback
What it does: Refunds up to 99% of duties paid on imported goods that are subsequently exported — either in the same form (unused merchandise drawback) or after manufacturing (manufacturing drawback).
Who qualifies: Any importer who re-exports imported goods within 5 years. Also applies to substitution drawback (same-kind goods).
How much you save: Up to 99% of the original duty paid. For a company paying $500K in annual duties and re-exporting 40% of those goods, the drawback is approximately $198K.
Temporary Importation Under Bond (TIB)
What it does: Allows temporary duty-free import of goods that will be exported within 1-3 years. Common for trade show equipment, testing samples, and professional tools.
Who qualifies: Any importer with a temporary need. Requires a bond (usually 110% of potential duty).
European Union
Inward Processing
What it does: Identical in concept to the UK scheme (which inherited it from EU law). Suspends duty on goods imported for processing and re-export.
Who qualifies: Any EU-based business with an Inward Processing authorisation from their national customs authority.
End-Use
What it does: Reduced or zero duty for goods imported for specific end uses — most commonly civil aircraft parts (0% duty under the WTO Agreement on Trade in Civil Aircraft), certain chemicals, and electronic components.
How much you save: Civil aircraft components enter the EU at 0% instead of the standard rate (which can be 3-14% depending on the component).
Outward Processing
What it does: Export EU goods for processing abroad (e.g., textile dyeing in Turkey), then re-import paying duty only on the value added abroad — not the full value of the returning goods.
EU tip: Outward Processing is underused but powerful. If you send EUR 100,000 of fabric to Turkey for dyeing (EUR 15,000 value added), you pay duty only on EUR 15,000 when the goods return — not EUR 115,000.
Brazil
Drawback Integrado
What it does: Suspends or exempts all federal import taxes (II + IPI + PIS + COFINS) on inputs used to produce export goods. Brazil's tax stack is notoriously heavy — this scheme is essential for any export-oriented manufacturer.
Who qualifies: Brazilian exporters who use imported inputs. Three modalities: Suspension (most common — duty suspended until export), Exemption (duty-free replacement of previously imported and exported goods), and Refund (reimbursement of duties paid).
How much you save: For a product with 14% II + 15% IPI + 2.1% PIS + 9.65% COFINS, the cumulative tax on import can exceed 45% of CIF value. Drawback Integrado eliminates all of it for export-bound goods.
Ex-Tarifario
What it does: Reduces the import duty (Imposto de Importacao) to 0-2% for capital goods and IT/telecom equipment that have no equivalent domestic production. This is a temporary tariff reduction granted by the government.
Who qualifies: Any Brazilian importer. Must prove the specific make/model has no Brazilian-made equivalent. Applied for through MDIC (Ministry of Development).
How much you save: Standard II rates for capital goods are 14-20%. Ex-Tarifario brings this to 0-2%, saving 12-20% of CIF value on qualifying equipment.
| Country | Top Scheme | Typical Saving | Best For |
|---|---|---|---|
| India | Advance Authorisation | 100% of BCD+SWS+IGST | Export-oriented manufacturers |
| UK | Inward Processing Relief | 100% duty + VAT | Processors and re-exporters |
| US | Foreign Trade Zone | 100% on re-exports; inverted tariff on domestic | Assembly and distribution |
| EU | Inward Processing | 100% duty on re-exports | Manufacturers with export markets |
| Brazil | Drawback Integrado | 45%+ of CIF value | Any exporter using imported inputs |
| South Africa | Schedule 3/4 rebates | 100% on re-exports; partial on AGOA | Automotive, textiles, AGOA exporters |
South Africa
Schedule 3 — Rebates of Duty
What it does: Provides full or partial duty rebates for specific uses. Item 317 allows rebate on goods for further manufacture (similar to IPR). Item 311 covers temporary imports for specific purposes (exhibitions, testing).
Schedule 4 — Rebates for Industry
What it does: Industry-specific duty rebates. The most significant is the Automotive Production and Development Programme (APDP II), which provides duty credits for local vehicle assembly and component manufacturing. Textile and clothing manufacturers also receive rebates under the Production Incentive (PI).
Who qualifies: Registered manufacturers in the qualifying industries. APDP II requires registration with the DTI and a minimum local content percentage.
How much you save: Under APDP II, assemblers importing completely-knocked-down (CKD) kits pay 0% instead of the standard 25% duty on vehicles. Component manufacturers earn duty credits on exports.
AGOA (African Growth and Opportunity Act)
What it does: South African goods exported to the US qualify for duty-free access on over 6,500 product lines under AGOA. While this is a US programme, South African exporters benefit directly.
How to Find the Right Scheme for Your Business
The right relief scheme depends on three factors: what you import, what you do with it, and where the finished product goes.
- Check your routes and rates — use our landed cost calculator to see the baseline duty you are paying across 47 countries
- Identify re-export flows — if any imported goods leave the country (processed or unprocessed), you likely qualify for inward processing or drawback
- Check for sector-specific schemes — automotive, aerospace, textiles, and agriculture have dedicated programmes in most countries
- Calculate the net benefit — factor in compliance costs (bonds, authorisations, record-keeping) against duty savings. Schemes with less than 2% duty saving may not justify the administrative overhead
Our opportunity engine scans your trade routes and flags duty relief you may be missing. Connect your ERP or upload your trade data — we identify savings automatically, including FTA preferences, drawback eligibility, and bonded warehouse opportunities.
Duty rates, relief schemes, and FTA savings across 47 countries. customs-compliance.ai