GKN Freight Services was asked to review the Brazilian Drawback Regime to identify ways to maximise the level of claims and savings. Our knowledgeable staff worked with the customer to improve processes and delivered over $875,000 savings in 2017 YTD. The savings result in an improvement of nearly 60% in the amount available to claim over the last 4 years.
The Government introduced a “drawback” regime in order stimulate the economy in Brazil. The drawback regime consists of the suspension, exemption, or refund of taxes generated by products used in the process of production of goods to be exported. The regime requires companies to forecast the goods to be exported. Therefore, there is an element of risk involved in the forecasting of goods and companies are open to fines if the forecasts are miscalculated.
GKN Freight Services Approach
GKN Freight Services started monitoring all imported materials and the export of finished goods to identify the opportunity for improvement in the process. After initiating a number of system enhancements and regularly attending the customer planning meetings, GKN Freight Services took over the Drawback process. The team felt comfortable increasing the proportion of Drawback through close collaboration between departments and having more detailed information
The percentage of Drawback applied for versus the amount that is available to claim increased from 36% to 95% over the last 4 years by improving communication flows and forecasting. The results are saving the customer over $875,000 YTD 2017 and are expected to continue to save at around this level in future years. Claims will increase as trade volumes increase.