DECREE OF THE MINISTER OF FINANCE
No.135/KMK.05/2000

ON
RELIEF OF IMPORT DUTY ON MACHINES, GOODS AND MATERIALS IN THE FRAMEWORK OF BUILDING/DEVELOPMENT OF INDUSTRIES/SERVICE INDUSTRIES

THE MINISTER OF FINANCE,

Considering :

• a. that in order to boost national industries and efficiency, it is necessary to grant facilities in the form of relief of import duty on machines, goods and materials in the framework of building/development of industries/services industries;
• b. that in the framework of enhancing the effectivity of granting of import duty facilities by continuously observing interests of state revenue, it is deemed necessary to replace the Decree of the Minister of Finance No.279/KMK.01/1997 jo. No.545/KMK.01/1997 and No.546/KMK.01/1997.

In view of :

• 1. Law No.1/1967 on foreign investments (Statute Book of 1967 No.1 , Supplement to Statute Book No.2818) as already amended by Law No.1 1/1970 (Statute Book of 1970 No.46, Supplement to Statute Book No.2943);
• 2. Law No.6/1968 on domestic investments (Statute Book of 1968 No.33, Supplement to Statute Book No.2853) as already amended by Law No.12/1970 (Statute Book of 1970 No.47, Supplement to Statute Book No.2944);
• 3. Law No.5/1984 on industrial affairs (Statute Book of 1984 No.22, Supplement to Statute Book No.3274);
• 4. Law No.10/1995 on customs affairs (Statute Book of 1995 No.75, Supplement to Statute Book No.3612);
• 5. Government Regulation No.17/1986 on the authority to regulate, foster and develop industries (Statute Book of 1986 No.23, Supplement to Statute Book No.3330);
• 6. Presidential Decree No.355/M/1999;
• 7. Decree of the Minister of Finance No.440/KMK.05/1996 on the stipulation of classification systems of goods and tariffs of import duty on imported goods, as already amended several times the latest by the Decree of the Minister of Finance No.569/KMK.01/1999;

DECIDES :

To stipulate :

THE DECREE OF THE MINISTER OF FINANCE ON RELIEF OF IMPORT DUTY ON MACHINES, GOODS AND MATERIALS IN THE FRAMEWORK OF BUILDING/DEVELOPMENT OF INDUSTRIES/SERVICE INDUSTRIES.

Article 1

Referred to in this decree as:

• 1. Building shall be the establishment of new industries producing goods and/or services;
• 2. Development shall be the expansion, diversification of products and restructuring (modernization and rehabilitation) of machines, factory equipment and other equipment along with components to step up production capacities, quality, product variety, effeciency of industries/service industries already existing;
• 3. Machines shall be machine units, machinery, factory installation equipment, devices or tools in both built-up and knocked down conditions which are used for the building or development of industries/service industries connected with activities of industries/service industries, excluding spare parts and components;
• 4. Goods and materials (raw materials) shall be all goods or materials, regardless of their types and compositions, which are used as materials or components to produce finished goods;
• 5. Industries shall be companies already securing business licenses to process crude materials, raw materials, semi-finished goods and/or finished goods into goods with a higher value of use, including activities of industrial designing and engineering;
• 6. Service industries shall be companies already securing business licenses to undertake activities in the service sector, as meant in the attachment to this decree.

Article 2

(1) Machines imported in the framework of building/development of industries/service industries shall be granted import duty relief so that the final tariffs become 5% (five percents).

(2) In the case of tariffs of import duty which are mentioned in the Indonesian Customs Tariff Book (BTBMI) being 5% (five percents) or lower, the effective tariffs shall be those in BTBMI.

(3) The relief of import duty as meant in paragraph (1) shall be granted for an import period of 2 (two) years, starting from the date of stipulation of decisions on relief of import duty.

Article 3

(1) In the framework of building, industries already securing the relief of import duty as meant in Article 2, excluding service industries, can be granted relief of import duty on goods and materials for the need of production for 2 (two) years according to installed capacities, so the final tariffs of import duty become 5% (five) percent with the import period of 2 (two) years, starting from the date of stipulation of decisions on relief of import duty on goods and materials.

(2) In the framework of development, industries already securing the relief of import duty as meant in Article 2, excluding service industries, can be granted relief of import duty on goods and materials for the additional need of production for 2 (two) years, so that the final tariffs of import duty become 5% (five percents), in the case of the development being aimed at raising capacities by at least 30% (thirty percents) of the installed capacities with the import period of 2 (two) years, starting from the date of stipulation of decisions on relief of import duty on goods and materials.

(3) In the case of tariffs of import duty which are mentioned in the Indonesian Customs Tariff Book (BTBMI) being 5.% (five percents) or lower, the effective tariffs shall be those in BTBMI.

Article 4

(1) The need for machines, goods and materials in the framework of building of industries and the additional need for goods and materials in the framework of development of industries shall be verified by the ministries/institutions concerned, namely:

• a. the Board in charge of capital investments and fostering of state-owned enterprises, for foreign/domestic investment (PMA/PMD) companies;
• b. the Ministry of Industry and Trade or other relevant institutions, for non-PMA/PMDN companies.

(2) In executing the verification as meant in paragraph (1), particularly in the framework of building, the ministries/institutions concerned shall use surveyors appointed by the government.

Article 5

Industries executing the building/development by using domestically made production machines can be granted relief of import duty on goods and materials as meant in Article 3 for the need of production/additional need of production for 4 (four) years, with the import period of 4 (four) years, starting from the date of stipulation of decisions on relief of import duty on goods and materials.

Article 6

Machines imported in used condition shall be accompanied by certificates from surveyors stating that the machines are still good and not scraps.

Article 7

(1) The facilities as meant in Article 3 shall not be effective for automotive assembly industries, except automotive component industries.

(2) Industries/service industries already securing the facilities of exemption from/relief of import duty on the basis of other provisions, can not use the facilities of relief on the basis of this decree.

Article 8

(1) Applications for securing the relief of import duty on machines, as meant in Article 2, in the framework of the building of industries, shall be accompanied by the following documents:

• a. Taxpayer Code Numbers (NPWP);
• b. Business licenses from the ministries/institutions concerned;
• c. Verification results from relevant departments/agencies to the needs of the engine, among others, include the amount, type, specification and price;
• d. Brief descriptions of production processes, by industries producing goods;
• e. Brief descriptions of business activities, by service industries.

(2) Applications for securing the relief of import duty on goods and materials, as meant in Article 3, in the framework of the building of industries, shall be accompanied by the following documents :

• a. Taxpayer Code Numbers (NPWP);
• b. Business licenses from ministries/institutions concerned;
• c. Results of verification of the need for goods and materials from ministries/institutions concerned; d. copies of documents import or domestic purchase of machines.

(3) Applications for securing the relief of import duty on machines, as meant in Article 2, in the framework of the development of industries, shall be accompanied by the following documents:

• a. Taxpayer Code Numbers (NPWP);
• b. Business licenses from the ministries/institutions concerned;
• c. Licenses for expansion, by industries raising capacities by at least 30% (thirty percent) of installed capacities which are approved by the ministries/institutions concerned;
• d. Lists of quantities, kinds, specifications and prices of machines;
• e. Brief descriptions of production processes, by industries producing goods;
• f. Brief descriptions of business activities, by service industries.

(4) Applications for securing the relief of import duty on goods and materials, as meant in Article 3, in the framework of the development of industries, shall be accompanied by the following documents:

• a. Taxpayer Code Numbers (NPWP);
• b. Business licenses from the ministries/institutions concerned;
• c. Results of verification of the additional need for goods and materials from the ministries/institutions concerned;
• d. Licenses for expansion, by industries raising capacities by at least 30% (thirty percents) of installed capacities which are approved by the ministries/institutions concerned;
• e. Copies of documents of import or domestic purchase of machines.

Article 9

(1) The applications for securing relief of import duty as meant Article 8 shall be submitted to:

• a. the Head of the Board of Capital Investments and Fostering of State-owned Enterprises, for the building of PMA/PMDN industries;
• b. the Director General of Customs and Excise or official appointed, for the development of PMA/PMDN industries and non-PMA/PMDN industries as well as the building of non-PMA/PMDN industries.

(2) In the case of the applications as meant in paragraph (1) fulfilling the requirements, the Head of the Board of Capital Investments and Fostering of State-owned Enterprises/Director General of Customs and Excise or officials appointed, on behalf of the Minister of Finance, shall made decisions on relief of import duty, accompanied by lists of machines or goods and materials granted import duty relief as well as appointment of loading seaports.

(3) Industries/service industries securing the facilities of relief of import duty shall be obliged:

• a. to keep books of import of machines, goods and materials for the need of customs audits;
• b. to store and maintain documents, records and books connected the granting of relief of import duty in business places for at least 10 (ten) years;
• c. to convey reports on the realization of import.

Article 10

(1) The machines, goods and materials already securing facilities of relief of import duty can only be used for the need of the relevant industries.

(2) Any misuse of machines, goods and materials as meant in paragraph (1) shall nullify the facilities of relief of import duty on the said goods, so that import duty owed must be paid and the relevant industries are subjected to a fine of 100% (one hundred percents) of the shortage of import duty.

Article 11

If the goods securing the facilities of relief of import duty as meant in Articles 2 and 3 fail to meet the provisions on quantities, kinds and technical specifications mentioned in lists of goods, the said goods shall be subjected to the collection of import duty and other import levies.

Article 12

(1) In order to safeguard state financial rights and assure the fulfillment of the customs and excise provisions in force, the Directorate General of Customs and Excise shall audit books, records and documents of companies connected with the import and use of goods.

(2) Based on the results of the audit as meant in paragraph (1), companies shall be responsible for the settlement of import duty owed and the administrative sanction in the form of a fine.

Article 13

(1) Companies securing facilities of exemption from import duty on machines, goods and materials which are based on the previous provisions and do not yet realize the import wholly, can continue to use decisions on the granting of customs facilities on the basis of the previous provisions up to the expiration of validity period of the said decisions, with the provision that the facilities can not be extended or changed.

(2) With the enforcement of this decree:

• a. the Decree of the Minister of Finance No.297/KMK.01/1997 as already amended by the Decree of the Minister of Finance No.545/KMK.01/1997;
• b. the Decree of the Minister of Finance No.546/KMK.01/1997; shall be declared null and void.

Article 14

Technical provisions required for the implementation of this decree shall be further stipulated by the Director General of Customs and Excise or the Head of the Board of Capital Investments and Fostering of State-owned Enterprises.

Article 15

This decree shall come into force as from the date of stipulation.

For public cognizance, this decree shall be published by placing it in State Gazette of the Republic of Indonesia.

Stipulated in Jakarta
On May 1, 2000

THE MINISTER OF FINANCE,
sgd
BAMBANG SUDIBYO

ATTACHMENT

LIST OF SERVICES INDUSTRIES ENTITLED TO OBTAIN FACILITIES

• 1. Tourism, excluding golf course
• 2. Agribusinesses/agriculture
• 3. Transport/communications
• 4. Medical service
• 5. Telecommunications
• 6. Shopping centers, supermarkets, department stores, limited to domestic investment companies
• 7. Mining
• 8. Public works
• 9. Information
• 10. Education/Research and Development
• 11. Forestry
• 12. Construction

THE MINISTER OF FINANCE
Sgd
BAMBANG SUDIBYO