25.903
Exempted supplies
FAR 25.903 enables duty-free importation of certain supplies for Government contracts, but strict certification and documentation procedures must be followed to claim exemptions.
Overview
FAR 25.903 outlines the procedures and requirements for obtaining exemptions from customs duties on certain supplies imported into the United States under Government contracts. It references specific subchapters of the Harmonized Tariff Schedule (HTSUS) that list eligible supplies and details the certification process required by contracting agencies. The section also covers the withdrawal of supplies (excluding equipment) for Government-operated vessels or aircraft from customs-bonded warehouses or foreign-trade zones without incurring duty or internal revenue tax, provided proper authority is cited on customs forms.
Key Rules
- HTSUS Exemptions
- Certain supplies listed in Subchapters VIII and X of Chapter 98 of the HTSUS may be imported duty-free for Government contracts, subject to agency certification requirements.
- Certification Requirement
- Contracting agencies must certify to the Commissioner of Customs that the imported supplies are for the purposes stated in the HTSUS, following specific regulatory formats and requirements.
- Supplies for Government Vessels/Aircraft
- Supplies (excluding equipment) for Government-operated vessels or aircraft can be withdrawn duty- and tax-free from customs-bonded warehouses or foreign-trade zones, with the contracting activity required to cite the relevant statutory authority on customs forms.
Responsibilities
- Contracting Officers: Ensure proper certification and documentation for duty exemptions; cite statutory authority on customs forms for vessel/aircraft supplies.
- Contractors: Provide necessary information and comply with customs documentation requirements.
- Agencies: Oversee compliance with certification and customs withdrawal procedures.
Practical Implications
- This section facilitates cost savings by allowing duty-free importation of certain supplies for Government use, provided strict documentation and certification procedures are followed. Failure to comply can result in loss of exemptions, additional costs, or customs penalties. Contractors and contracting officers must be familiar with the relevant HTSUS provisions and customs regulations to ensure compliance.