A new Minister of Finance Regulation lowers the threshold for import duty exemption for the import of consigned goods.
The above provision is regulated under Minister of Finance Regulation No. 112/PMK.04/2018 on Amendment of Minister of Finance Regulation No. 182/PMK.04/2016 on the Import of Consigned Goods (Regulation 112), which will become effective on 10 October 2018. Please click here to view our last client alert on import of consigned goods.
The lowering of the exemption threshold is based on a government study on e-commerce development. Regulation 112 is also intended to create a level playing field between national/domestic products of small medium enterprises and products imported through consignment by large distributors.1
Regulation 112 also lowers the maximum customs value per consignee per day that can obtain exemption from import duty. We will elaborate on the changes below.
Several Key Changes
Import Duty Exemption
Regulation 112 sets a lower threshold for import duty exemption for consigned goods for use i.e., maximum customs value FOB of USD75 for each consignee per day, or more than one delivery/shipment per day, as long as the customs value for all delivered goods is not more than FOB USD75.2 The previous provision stipulated a maximum customs value FOB of USD100 for each consignee per delivery/shipment.
Correction to the Customs Declaration BC 1.1 (Pemberitahuan Pabean BC 1.1)
The postal operator3 will further specify the items in the Customs Declaration BC. 1.1 form if the form does not yet include the details of consigned goods for each consignment note or each item of consigned goods. The specification should be done by submitting a correction of the Customs Declaration BC 1.1 form for each consignment note or each item of consigned goods.4
The correction can be done by the designated postal operator, by submitting a manifest which must at least include the voyage/flight number, port of destination/unloading, number and brand of packaging/container or number and brand of bag, and gross weight.5
Regulation 112 stipulates that the above data can be submitted in stages as the designated post organizers become ready to exchange data.6
Consigned Goods in the Form of Excisable Goods
There is one additional item of consigned goods in the form of excisable goods that are exempted from import duty, excise and/or tax for the purpose of import, i.e., 40 milliliters of other tobacco products. So the consigned goods in the form of excisable goods that are exempted from import duty, excise and/or tax are as follows7:
- 40 cigarettes, 10 cigars, 40 grams of sliced tobacco/other tobacco, or 40 milliliters of other tobacco products
- 350 milliliters of beverage containing ethyl alcohol
Receipt of Consigned Goods
Under Regulation 112, if the designated postal operator can deliver the consigned goods in good condition to the head of customs office where the customs obligations are fulfilled in a timely manner, the head of customs office will issue a receipt with a format as set out in Regulation 112. 8
Release of Consigned Goods to be Transported to a Temporary Storage Area (Tempat Penimbunan Sementara/TPS) in the Customs Zone in Another Customs Office Area
Consigned goods that are delivered through a designated postal operator may be released from a customs zone or other location that is deemed equal to a temporary storage area to be transported to a temporary storage area at a customs zone in another customs office area.
To release the consigned goods, the goods owner must submit a notification on relocation of the goods to the customs and excise official handling the administration of manifest at the customs office that supervises the temporary storage area of origin. The notification must at least include the temporary storage area of origin, the temporary storage area of destination, voyage number/flight number/land transport vehicle number, date of departure/arrival.
Similar with the provision on Correction to the Customs Declaration BC 1.1, the above data may be provided gradually in accordance with the readiness for the implementation of data exchange between the designated post organizers that are appointed internationally.9
The Correction of Payment Determination Letter of Import Duty, Excise and/or Tax (Surat Pembayaran Bea Masuk, Cukai, dan/atau Pajak/SPPBMCP)
A consignee or its proxy may amend a payment determination letter of import duty, excise and/or tax by changing information in the letter if there is any error, miscalculation and/or confusion in implementing the relevant regulations.10 The error or miscalculation can be in the name, address, taxpayer identification number, or the number/data/due date of a payment determination letter of import duty, excise and/or tax.11
The correction must be submitted in writing to the relevant head of customs office with a format as set out in Regulation 112 within 30 days after the date of payment determination letter of import duty, excise and/or tax.12 Evidence and relevant supporting data and documents should also be submitted.
The head of customs office will accept or reject the correction within 14 days after the date of the correction receipt.13
Implication for Importers
- The determination of a lower threshold of import duty exemption is intended to protect national interests as well as to encourage the growth of domestic industries, which might affect the trade balance of Indonesia. As mentioned earlier, the Government aims to create a level playing field between small medium industries/enterprises and large distributors.
- There is a lower maximum FOB value per consignee per day. So an importer that imports goods with FOB value of more than USD75 (say US$100) in one day, the difference would be dutiable.
- The benefit of importers is reduced because of the lower threshold for import duty exemption (FOB USD100 vs FOB USD75).
- The importers are now given the chance to make a correction of the tariff determination and customs value.
1 According to Director General of Customs and Excise, Mr. Heru Pambudi (source: click here)
2 Article 13 (1) and (1a) of Regulation 112
3 Postal operator or "Penyelenggara Pos" is an entity that engages in postal affairs
4 Article 11 (1) and (2) of Regulation 112
5 Article 11 (5) of Regulation 112
6 Article 11 (5a) of Regulation 112
7 Article 14 (1) of Regulation 112
8 Article 24 (8) of Regulation 112
9 Article 28 (1a) of Regulation 112
10 Article 37A (2) of Regulation 112
11 Article 37B (1) of Regulation 112
12 Article 37A (4) and (5) of Regulation 112
13 Article 37C (1) of Regulation 112