Complete List of Goods & Services Exempted from VAT, Import Duty, and STLG

The government released the latest regulation that includes a complete list of goods and services that are eligible for Value Added Tax (VAT), Sales Tax on Luxury Goods (STLG), and import duty facilities.

The facilities are: (1) VAT exemption; (2) Not-collected VAT; (3) import duty exemption; and (4) Not-collected STLG.

Read: 10 Important Points in  New VAT Regulations

Confirmation of all these facilities is contained in Government Regulation (PP) Number 49 of 2022, which confirms a number of clauses in Law (UU) Number 7 of 2021 on Harmonization of Tax Regulations (HPP).

10 Basic Commodities Exempted from VAT

Previously, through the HPP Law, the government stipulated basic commodities as Taxable Goods (BKP)—from before they were not tax objects. However, there is an affirmation in Article 16B of the HPP Law, basic commodities that are urgently needed by many people and are strategic in nature will get VAT facilities.

For this reason, the government issued PP Number 49 of 2022 as an implementing regulation for the amendment to this provision.  In essence, the government emphasized that the type of VAT facility obtained for the transfer of basic commodities is a VAT exemption facility.

There are at least 10 types of basic commodities that get VAT exemption as follows:

1. Rice and Grain;
2. Corn;
3. Sago;
4. Soy;
5. Consumption Salt;
6. Meat;
7. Eggs;
8. Milk;
9. Fruits; and
10. Vegetables 

However, the government further regulates the criteria for basic commodities, details of which can be found in the attachment to Government Regulation Number 49 of 2022.

List of VAT Free Strategic Goods

In addition to basic commodities, the government also exempts VAT on certain strategic goods as follows:

Electricity; Clean water; Consumable white crystal sugar made from sugarcane without additional flavors or coloring; mining products or drilling products taken directly from the source, which include: crude oil, natural gas flowing through pipes, geothermal, non-metal mineral mining products;  certain rocks, and certain mineral ores (except coal); Liquified Natural Gas (LNG) and Compressed Natural Gas (CNG) Polio vaccine; Textbooks, holy books and religious books; factory machinery and equipment;

Marine and fishery products; Cattle; Seedlings and/or seeds; Feed and feedstuffs; Drugs that get import duty-free facilities; human therapy materials; Weapons, ammunition and military equipment received by government agencies; Special land vehicles for TNI/POLRI; Presidential state cars; landed houses and flats; silver craft raw materials; Electricity 6,600 VA and below and connection fees; raw hides and skins; presidential vehicles;  and   Museums, zoos and the like

VAT-Free Services 

In the same regulation, the government also stipulates types of strategic taxable services (JKP) that get VAT exemption facilities, as follows:

Medical health services; Social services; Mail delivery service with stamps financial services; insurance services; educational services; non-advertising broadcasting services; Services for providing geography boundary data, topographic maps, hydrographic maps, and aerial photographs of the Ministry of Defense or the Indonesian National Armed Forces;

public transportation services on land and in water as well as domestic air transportation services which are an inseparable part of foreign air transportation services; labor services; public telephone services using coins;  money remittance service by postal money order; and  Rental services for public flats and public houses;

  

Not-collected VAT

In addition to exempting VAT from being collected, the government also provides VAT-free facilities for the transfer or import of the following taxable goods and taxable services:

• Transfer of gold bars that are not for the benefit of foreign exchange reserves;
• Means of transportation in water, underwater, air and rail and their spare parts, shipping safety equipment and human safety imported by agencies in the field of defense and security or other government-appointed parties;
• Sea transport ships, rivers and lakes, crossings, fishing vessels, pilot boats, tugboats, and barges and their spare parts—including ship equipment, as well as shipping and human safety equipment.
• With a note, these goods are imported by shipping, fishing companies, port services, river, lake and national crossing transportation service providers.
• Aircraft and its spare parts, aviation and human safety equipment, repair and maintenance equipment imported and used by the Business Air Transport Agency Commerce
• National Commercial Air Transport Business Entity;
• Badan Usaha Angkutan Udara Niaga Nasional;
• Trains and their spare parts, including tools for repair and maintenance, railway infrastructure imported by the national railway operator business entity or the appointed party;
• Services received by national shipping companies, national fishing companies, national port service providers and national river, lake and ferry transportation service providers;
• Aircraft rental services as well as maintenance and repair services received by the National Air Transport Agency;  and
•  Train maintenance and repair services received by Public Railway Facility Operations Business Entities.
• Aircraft rental services as well as maintenance and repair services received by the National Air Transport Agency;  and
• Jasa perawatan dan perbaikan kereta api yang diterima Badan Usaha Penyelenggara Sarana Pekeretaapian Umum.

Facility of Import Duty and STLG 

In addition to VAT, Government Regulation Number 49 of 2022 also details the exemption from import duty and STLG for the following taxable goods imports:

• Gift items for public worship, charity, social or cultural purposes;
• Barang kiriman hadiah untuk keperluan ibadah umum, amal, sosial atau kebudayaan;
• Goods for scientific research and development purposes;
• Goods for persons with disabilities;
• Caskets or other packages containing bodies or ashes;
• Goods transferred from overseas for Indonesian workers, students, civil servants, members of the military or members of the police as long as the goods are not for trading and have received a recommendation from the local embassy/consulate;
• Personal belongings of passengers, crew members, border crossers and goods shipped in a certain amount;
• Temporary imported goods;
•  Goods of contractors from cooperation contract for upstream oil and gas activities, geothermal operations;
• Goods that are exported and then re-imported;
• Imported goods previously exported for repair, workmanship and testing;
• Goods that get the facility of Import Facility for Export Purposes (KITE);
•  Goods and materials or machines for MSMEs that have KITE facilities;
• Goods related to coal mining concession cooperation agreements;  and
• Consignment or grants for disaster management;

Postscript

For taxable goods and/or taxable services that are VAT or STLG-not collected can be used without using a Certificate of Not Being Collected.

• Input tax on the acquisition or import of taxable goods/taxable services that gets VAT exemption facilities cannot be credited.
• Input tax on the acquisition or import of taxable goods/taxable services that gets VAT-free facilities can be credited.
• The government will periodically evaluate all tax facilities by considering economic conditions and their impact on state revenues. (ASP/CHY/KEN)

 

Peraturan Pemerintah (PP) Nomor 49 Tahun 2022