Temporary Admission: Suspending Duty Without an ATA Carnet (2026)
A $180,000 machine, nine months of trials, and a duty bill that should never have been paid
A US mill wants to trial an Indian-built CNC machining centre before committing to a fleet order. The machine lands in Savannah, runs for nine months, and ships back. Yet under a normal consumption entry, CBP treats that arrival exactly like a purchase: full customs value, full duty, merchandise processing fee. On a $180,000 unit at 4.4%, that is $7,920 in duty on equipment the importer will never own.
The mechanism that fixes this is temporary admission — Temporary Importation under Bond in US practice. Most importers know it through a single instrument, the ATA carnet, and wrongly conclude they have no option when the carnet does not fit. The carnet is a document. Temporary admission is a procedure, and it is considerably wider.
What temporary admission suspends — and what it forbids
Across jurisdictions the procedure rests on the same three conditions. The goods must be intended for re-export and remain identifiable; they must leave in the same state, allowing only for normal wear; and the importer holds them for use rather than for sale.
If the goods are simply waiting for a buyer or a better tariff window, temporary admission is the wrong tool and a customs warehouse is the right one. If they are going to be worked on, inward processing applies instead. Getting this boundary wrong is the single most common cause of retrospective assessment, because customs treats a procedure used outside its purpose as a diversion rather than a filing error.
The mechanics then diverge sharply by market, and the divergence is what determines your working capital:
| Market | Instrument | Duty treatment | Period |
|---|---|---|---|
| United States | TIB, HTSUS Ch. 98 Subch. XIII | Duty-free, bond at 2× duties (19 CFR 10.31(f)) | 1 year, 2 extensions, max 3 years |
| European Union | Temporary admission, UCC art. 250–253 | Total relief, or partial at 3%/month | 24 months, extendable |
| United Kingdom | Temporary admission (HMRC) | Total relief, or partial at 3%/month | Typically up to 24 months |
| India | Section 74 drawback, Customs Act 1962 | Duty paid up front, refunded on re-export | 2 years, sliding scale if used |
| ATA chain | ATA carnet | Total relief only | 12 months (carnet validity) |
The 3%-per-month rule, and the number it is calculated on
In the EU and UK, cases outside the closed list of total-relief situations fall to partial relief: 3% per month or part-month of the duty that would have been payable had the goods been released for free circulation on the date the temporary admission declaration was accepted.
Two points decide the arithmetic, and both are routinely misread. The base is the duty amount, never the customs value — a common misreading turns a £900 charge into a £27,000 one. And the running total is capped at the full duty, so partial relief can never cost more than outright importation. At 3% a month the theoretical break-even sits around thirty-four months, well beyond the standard twenty-four-month ceiling.
The US takes a different route entirely: TIB is duty-free outright, with the exposure sitting in the bond rather than in a monthly charge. That is cheaper while it works, and materially more expensive when it does not, because a default triggers liquidated damages against the bond rather than a plain duty bill.
Three worked examples
Example 1: Indian CNC centre trialled in the US for nine months
Customs value = $180,000
HTSUS 8457.10 duty ≈ 4.4% (order of magnitude, verify in the current HTSUS)
Duty on a consumption entry = $7,920
TIB duty payable = $0
Bond at 2× duties and taxes ≈ $15,840
Nothing is paid, but $15,840 of bond capacity is committed for up to three years. Exporting late converts that figure from a reserved line into an actual claim.
Example 2: US camera package hired to a UK broadcaster for five months
Customs value = £195,000
Professional equipment → total relief case
Duty = £0 · Import VAT = £0
Had it been partial relief: 3% × 5 = 15% of duty, plus VAT in full
Import VAT avoided at 20% ≈ £39,000 of cash flow
The duty saving here is small. The VAT treatment is what moves the number, which is why establishing the total-relief case before filing is worth more than negotiating the rate.
Example 3: testing rig imported into India, re-exported at ten months
Duty paid at import = $24,000
Section 74(2), used 10 months → typically 70% recovered
Drawback received ≈ $16,800
Net duty cost ≈ $7,200, plus 10 months of cash locked up
India's model front-loads the full duty and refunds part of it later, so the true cost is the retained slice plus the financing of the whole amount in the interim. Where the equipment qualifies, an ATA carnet usually beats section 74 on both counts — see our India import guide for the wider procedural context.
Discharge: the step that is assumed and then missed
A temporary admission is not closed by the goods physically leaving. It is closed by a filed discharge: a re-export declaration, entry to another procedure, or release for free circulation. In the US, that means presenting proof of exportation or destruction against the TIB before the bond period expires; in the EU, it means a re-export declaration referencing the authorisation.
Where EU goods are ultimately bought and released for free circulation, UCC article 86(1) deducts amounts already paid under partial relief from the resulting debt — trialling before buying carries no double charge. US practice is less forgiving: converting a TIB to a consumption entry is generally not available, and the usual route is export followed by a fresh import.
One operational habit prevents most defaults. Diary the discharge date at the moment of entry, not at the moment of shipment, and request extensions before expiry. After expiry the conversation stops being about paperwork and starts being about liability — see our US import guide for how CBP handles that escalation.
Size the exposure with the TRADE-COST calculator
Enter value, origin and HS code to get the reference duty figure — the same number that drives both the 3% monthly charge and the bond amount.
Run the calculation →Conclusion: the carnet is a convenience, the procedure is the entitlement
If the ATA carnet does not cover your case, that is not a reason to pay the duty. It is a signal to apply for temporary admission directly, then decide between total relief where the situation is listed and partial relief where it is not.
Three questions asked before shipment settle almost every file: do the goods leave in the same state, by exactly what date, and does the available bond or guarantee capacity cover duty plus tax? In practice, temporary admissions rarely go wrong on the rate. They go wrong on an unextended deadline or an exhausted bond line.
Frequently asked questions
How is an ATA carnet different from the temporary admission procedure?+
The carnet is an international guarantee document; temporary admission is the customs procedure itself. A carnet is a convenient way to place goods under that procedure across roughly sixty to eighty customs territories, but it only covers three families — professional equipment, commercial samples, and goods for trade fairs or exhibitions — and only at total relief. The moment your case falls outside those families, typically leased machinery that actually produces output, moulds in series use, or extended field trials, the carnet does not apply and you need an authorisation from the customs authority of the importing country instead.
What exactly does a US TIB bond cover, and what happens if I miss the export deadline?+
Temporary Importation under Bond, entered under HTSUS Chapter 98 Subchapter XIII, admits goods duty-free on condition they are exported or destroyed. The bond is set under 19 CFR 10.31(f) at double the duties and taxes that would otherwise accrue. The initial period is one year, extendable twice for a maximum of three years. Miss the deadline and CBP assesses liquidated damages against the bond rather than simply billing the duty, which is why TIB defaults typically cost more than a plain dutiable entry would have.
Can I repair, modify, or process goods held under temporary admission?+
Not under temporary admission proper. The goods must leave in the same state, allowing only for normal depreciation through use. Anything that alters them — machining, assembly, incorporation into a finished article, chargeable repair — belongs to inward processing, a separate procedure with its own authorisation and discharge rules. In the US, repair and alteration have their own TIB subheading, so the classification chosen at entry effectively fixes what you are allowed to do with the goods.
Does India offer a 3%-per-month partial relief like the EU?+
No, and this is the structural difference importers into India most often miss. India generally has you pay the duty in full at import and then claim it back on re-export under section 74 of the Customs Act 1962. Unused goods re-exported within two years typically recover 98%; goods that have been used recover progressively less on a published sliding scale that falls to nil beyond roughly eighteen months of use. The cash is therefore fronted rather than suspended, which changes the working-capital case entirely.
Is import VAT suspended along with the duty?+
Only where relief from duty is total. In the EU and UK, goods qualifying for total relief under temporary admission are also relieved of import VAT. Under partial relief, import VAT remains due in full on the customs value even though you only pay 3% of the duty per month. It is recoverable if you hold the right to deduct, but it leaves the bank account first, so on heavy equipment the VAT cash-flow gap is usually larger than the duty saving itself.
Marie Fontaine
Marie leads customs research at TRADE-COST. She spent eight years in tariff classification and post-clearance audits before joining the product team to turn customs expertise into software.
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