Regulation Update
Regulation Released, Seller Must Issue Government-Borne STLG Invoice

Monday, 01 March 2021

Regulation Released, Seller Must Issue Government-Borne STLG Invoice

The government officially released the rules related to the provision of Government-borne (DTP) Sales Tax on Luxury Goods (STLG) on cars with a cylinder capacity of 1,500 cc and below.

In the provisions contained in the Minister of Finance Regulation (PMK) Number 20 / PMK.010 / 2021, the government confirms that for the STLG borne by the government, the seller still had to make a tax invoice.

In the tax invoice must be stated the description: "STLG borne by the government ex PMK Number 20 / PMK.010 / 2021" (PPnBM ditanggung pemerintah eks PMK Nomor 20/PMK.010/2021). The tax invoice is then reported in the VAT Periodic Tax Return (SPT).

Otherwise, the facility cannot be used, and the seller will still have to pay the STLG payable arising from the delivery of the car.

Sales Performance Report

In line with the issuance of the regulation, the Ministry of Industry also released other supplementary rules, in the form of Decree of the Minister of Industry Number 169 of 2021.

In the regulation, apart from requiring sellers to make tax invoices, it is also mandatory to make a report on the realization of STLG borne by the government and the performance of quarterly sales to the Director General of Metal, Machinery, Transportation Equipment and Electronic Engineering at the Ministry of Industry.

In addition, industrial companies that produce motor vehicles are also obliged to submit local purchase plans as well as statements of the utilization of local purchase results.

The Ministry of Industry has also determined 21 types of vehicles from six car manufacturers that will get the facilities.  The six companies include PT Toyota Motor Manufacturing Indonesia, PT Astra Daihatsu Motor, PT Mitsubishi Motors Krama Yudha Indonesia, PT Honda Prospect Motor, PT Suzuki Motor Indonesia and PT SGMW Motor Indonesia.

Local Content Requirements

As it is known, the provision of this facility has been announced by the government before the regulation is officially released.

In detail, the regulation promulgated on February 26, mentions that the government-borne STLG facility is given for nine months, which is divided into three periods. 

Meanwhile, the amount of STLG that will be borne by the government will vary in each period.

In the tax period of March 2021 to May 2021, the amount of STLG borne by the government is 100%.

Then, starting from the tax period of June to August 2021, the amount is reduced to 50% and in the tax period of September to December again decreases to 25%.

This facility is provided for the sale of motorized sedan cars or station wagons and vehicles with axle drives (4X2) with a cylinder capacity of 1,500 cc and below.

The vehicle must meet the minimum requirements of local purchase, which is in the form of the use of components derived from domestic production, at least 70%.

Boosting Consumption

The consideration is that the incentive is intended to encourage public consumption of motor vehicles.

Thus, the automotive industry, which is depressed during the Corona Virus Disease 2019 (Covid-19) pandemic, is expected to recover and become an engine of economic growth.

The government noted that the automotive industry is an industry that can have a big impact considering a large number of workers absorbed, which reaches 1.5 million direct workers and 4.5 indirect workers. 

In addition, the automotive supporting industry also contributed IDR 700 trillion to GDP in 2019.

Based on government data, there are approximately 7,451 factories that manufacture products that are absorbed by the automotive industry.



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