Indonesian tax roundup: new system on proof of origin of imports

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Indonesian tax roundup: new system on proof of origin of imports

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Aditya Wicaksono and Dwipa Abimanyu Dewantara of GNV Consulting explain how Indonesia hopes to benefit from new regulations concerning proof of origin of imported goods, excise exemptions, and four-wheeled battery-based electric vehicles

The Indonesian Directorate General of Customs and Excise (DGCE) has issued Decision No. KEP-220/BC/2024 concerning Full (Mandatory) Implementation of the Retroactive Check Request Information System and Notification of Rejection for Proof of Origin of Goods in CEISA 4.0. The goal is to enhance the effectiveness of examining the proof of origin of goods in importation, such as certificates of origin and declarations of origin.

The system is applied in CEISA 4.0 (Customs-Excise Information System and Automation), which supports the digitalisation of import services and focuses on the following:

  • Retroactive checks – verification of the proof of origin documents after the goods have arrived. These are applied in cases where the proof of origin document is not available at the time of importation. Documents must be submitted in accordance with CEISA 4.0 regulations for re-verification.

  • Rejection notification – rejection of invalid documents. The importer will receive a rejection notification if the document does not meet the requirements. This process is conducted automatically through CEISA 4.0.

The regulation strengthens the commitment of the DGCE to:

  • Enhance transparency and accuracy in managing the proof of origin of goods;

  • Support trade efficiency; and

  • Promote the implementation of technology in customs.

The regulation became effective on November 3 2024.

Granting of excise exemptions and related monitoring, valuation, and revocation

The DGCE has issued Regulation No. PER-13/BC/2024 to amend DGCE Regulation No. PER-43/BC/2017 related to Registration, Stipulation of Usage of Excisable Goods, Granting of Excise Exemptions, Monitoring, Evaluation, and Revocation related to Excise Exemption Facilities. These facilities aim to support various needs, such as the production of goods, research, diplomatic activities, and social purposes.

The new regulation establishes detailed rules regarding:

  • The criteria for goods that can receive excise exemption facilities;

  • The registration procedure to obtain an excise exemption;

  • The monitoring and evaluation mechanism; and

  • The conditions for revoking the facility in the event of misuse or non-compliance.

The types of excisable goods that can receive an exemption are as follows:

  • Goods for the purposes of:

    • Raw materials or auxiliary materials for the production of non-excisable goods;

    • Scientific R&D;

    • Foreign diplomatic representatives and international experts based on reciprocity;

    • Social purposes such as healthcare services, disaster relief, or religious ceremonies; or

    • Goods entering bonded storage.

  • Specific goods:

    • Denatured ethyl alcohol unfit for consumption; or

    • Goods consumed by passengers or crew members travelling abroad.

The regulation became effective on November 13 2024.

Incentives for the importation and/or delivery of four-wheeled battery-based electric vehicles

The minister of investment and downstreaming/head of the Investment Coordination Agency has issued Regulation No. 1 of 2024 to amend Regulation No. 6 of 2023 concerning Guidelines and Governance for the Granting of Incentives for Import and/or Delivery of Four-Wheeled Battery-Based Electric Vehicles in the Context of Acceleration of Investment.

The goal is to adjust the management of incentives in line with technological developments, international agreements, and the dynamics of investment, and thereby provide a new foundation for the governance of incentives for battery-based electric vehicles in Indonesia. It is expected that the adjustment of these regulations will enhance investment competitiveness, support the implementation of international agreements related to electric vehicles, and accelerate the production of locally manufactured four-wheeled battery-based electric vehicles.

The key points are as follows:

  • Regulation of the granting of incentives to business operators, including:

    • 0% import duty and/or luxury goods sales tax borne by the government for the importation of electric vehicles;

    • The granting of incentives for imports from countries of origin that have an international agreement with Indonesia; and

    • Preferential tariffs that can be applied in accordance with a ministerial regulation concerning import duty tariffs based on international agreements.

  • The procedure for applying for incentives through the Online Single Submission system includes:

    • A letter proposing the granting of incentives; and

    • A letter of approval for the utilisation of incentives, with the condition that the second-stage application or changes are made within the specified deadlines.

The regulation became effective on November 27 2024.

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