Regulation Update
Government Bears Import Duty for 33 Industries

Tuesday, 29 September 2020

Government Bears Import Duty for 33 Industries

JAKARTA. The government again issued tax incentives for industries affected by Corona Virus Disease 2019 (Covid-19), in the form of import duties borne by the government. This is as stated in the Minister of Finance Regulation (PMK) number 134/PMK.010/2020, which is effective from 22 September to 3 December 2020.  

This time the facility is given to goods or materials imported or issued from the Bonded Logistics Center (PLB), Bonded Warehouses or Bonded Zones by certain industries to the customs area. The government has determined that 33 industries have the right to use this facility.

The relaxation is only given to goods that have not been produced domestically. Even if it has been produced, its existence has not met the required specifications or the amount of production has not met the needs of the domestic industry in general.

List of Industries Receiving Incentive:

  1. Instant Noodle Manufacturing Industry
  2. Animal Feed Manufacturing Industry
  3. Sweetener Manufacturing Industry
  4. Corn Refining Industry and / or Corn Food Processing Industry
  5. Canned Fish Processing and Preservation Industry
  6. Bakery and Cake Products Industry
  7. Meat Products Processing and Preservation Industry
  8. Seaweed Processing Industry
  9. Potato Processing Industry
  10. Dairy Processing Industry
  11. Fruit Processing Industry
  12. Cocoa Processing Industry
  13. Glasses Industry
  14. Children's Toy Industry
  15. Tire Industry
  16. Hand Sanitizer Industry
  17. Diinfectant Soap Industry
  18. Rubber Gloves Industry
  19. Pharmaceutical industry
  20. Personal Protective Equipment (PPE) Protective Clothing industry
  21. PPE head protection industry
  22. Mask Industry
  23. Medical Device and Hospital Equipment Industry
  24. Ventilator Industry
  25. Manufacture of Two or Three- Wheeled Motorized Vehicles
  26. Shipping Support Industry
  27. Bicycle Manufacturing Industry
  28. Canned Packaging, Bottle Caps and Battery Jacket Industry
  29. Manufacture of electronic components and / or products
  30. Fiber Optic Cable Manufacturing Industry
  31. Smart Card Manufacturing Industry (Plastic Cards, Security Plastic Cards, Electronic Cards and Cell Phone Cards)
  32. Telecommunication Equipment Manufacturing Industry
  33. Cellular Telephone Manufacturing Industry

Read: Getting Sanction of VAT on Export Straight for A Better Indonesia

To obtain this facility, eligible importers can apply to the Minister of Finance. The application is submitted through the Indonesian National Single Window (INSW) system, by attaching a number of information such as company identity, list of goods and materials that will receive facilities, invoices and packing lists, letters of recommendation from relevant ministry officials. 

Especially for facility application for goods released from bonded warehouse or bonded zone, must also be attached;  company name, Taxpayer Identification Number (NPWP), a Bonded Zone Entrepreneur License (PDKB).

Regarding the application, the Director General of Customs and Excise will examine it. If it is deemed appropriate, it will be approved on behalf of the Minister of Finance. This approval decision will be issued a maximum of three hours after the application is submitted via the INSW system, or three days if the application is submitted manually or offline.

Exception

Not all items that are included in the list of recipients of the facilities mentioned may enjoy government-borne import duties. For items that have previously obtained other facilities, excluded from the relaxation.

Some of these items have been subject to 0% import duty, including 0% import duty facilities arising from international agreements.  

In addition, there are also goods that are subject to anti-dumping import duty/temporary anti-dumping import duty rates, safeguard import duty, rewards import duty and retaliatory import duty. Then, imported goods and materials for storage in bonded storage area (TPB) are also excluded from this facility

Monitoring dan Evaluation

After the application is approved, the company must submit a customs declaration, which includes the number and date of the decision on granting facilities, a statement of the special government-borne import duty and the value of the government-borne import duty.

In addition, companies are also required to book the imports of goods and materials that have received facilities, as well as store these documents, records and books for an expiration period of 10 years.

For the use of these facilities, the government will conduct an evaluation to ensure that the goods whose import duties are borne by the government are in accordance with the provisions. If there is abuse, the import duty that previously borne by the government will become payable and must be paid.

Unequal Budget Ceiling

In addition to determining the criteria for the use of facilities, the government also sets the budget ceiling value for the import duties to be borne. The total budget provided by the government reaches IDR 806.06 billion.

The largest ceiling is allocated to bear the import duty of the Personal Protective Equipment (PPE) industry of protective clothing worth IDR 153.05 billion and IDR 72.24 billion for cocoa processing industry.

Later on, the realization of the utilization of import duty facilities borne by the government, will be recorded as subsidy spending. The recording will be carried out by each Proxy of Budget User (KPA) based on the customs declaration submitted by the company.
 



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