THE GOVERNMENT REGULATION
NO. 7/2007

CONCERNING
THE THIRD AMENDMENT TO GOVERNMENT REGULATION NO. 12/2001 ON THE IMPORT AND/OR DELIVERY OF CERTAIN STRATEGIC TAXABLE GOODS EXEMPT FROM VALUE ADDED TAX

THE PRESIDENT OF THE REPUBLIC OF INDONESIA,

Considering:

That in the framework of boosting the growth of business communities and enhancing competitiveness, particularly in the agricultural sector, it is necessary to stipulate a government regulation on the third amendment to government regulation No. 12/2001 on the import and/or delivery of certain strategic taxable goods exempt from value added tax;

In view of:

• 1. Article 5 paragraph (2) of the constitution of 1945;
• 2. Law No. 6/1983 on Taxation General Provisions and procedures (statute book of1983 No. 49, supplement to statute book No. 3262) as has already been amended several times and the latest by law No. 16/2000 on the second amendment to law No. 6/1983 concerning taxation general provisions and procedures statute book of 2000 No. 126; supplement to statute book No. 3984)
• 3. Law No. 8/1983 on Value Added Tax on Goods and Services and Sales Tax on Luxury goods (Statute book of 1983 No. 51, supplement to statute book No. 3264) as has already been amended several times and the latest by law No. 18/2000 on the second amendment to law No. 8/1983 concerning value added tax on goods and services and sales tax on luxury goods (statute book of 2000 No. 128, supplement to statute book No. 3986);
• 4. Government regulation No. 12/2001 on the import and/or delivery of certain strategic taxable goods /exempt from value Added Tax (statute book of 2001 No. 24, supplement to statute book No. 4083) as has already been amended several times and the latest by government regulation No. 46/2003 on the second amendment to government regulation No. 12/2001 on the import and/or delivery of certain strategic taxable goods exempt from value added tax (statute book of 2003 No. 97, supplement to statute book No. 4315);

HAS DECIDED:

To Stipulate:

GOVERNMENT REGULATION ON THE THIRD AMENDMENT TO GOVERNMENT REGULATION NO. 12/2001 ON THE IMPORT AND/OR DELIVERY OF CERTAIN STRATEGIC TAXABLE GOODS EXEMPT FROM VALUE ADDED TAX

Article 1

Several provisions in government regulation No. 12/2001 on the import and/or delivery of certain strategic taxable goods /exempt from value Added Tax (statute book of 2001 No. 24, supplement to statute book No. 4083) as has already been amended several times by:

1. Government regulation No. 46/2002 (statute book of 2002 No. 82, supplement to statute book No. 4217);

2. Government regulation No. 46/2003 (statute book of 2003 No. 97, supplements to statute book No. 4315); shall be amended as follow:

1. Provisions in Article 1 number 1 sub-paragrah b.2 is amended and sub-paragraph b.3 is deleted, so Article 1 become as follows:

Article 1

Referred to in this government regulation as:

1. Certain strategic taxable goods shall be:

• a. capital goods in the form of machines and factory equipment in an installed or broke down condition, excluding spare parts;
• b. feed of animal, fowl and fish and/or raw material for making animal, fowl and fish feed;
• c. agriculture products;
• d. seeds and/or parent stocks of agricultural, plantation, forestry, animal husbandry, breeding or fishery products;
• e. abolished;
• f. abolished;
• g. drinking water channeled through pipe by drinking water companies; and
• h. electricity, except for housing with voltage of above 6.600 (six thousand and six hundred) watt;

2. Agricultural products shall be goods resulting from business activities in the following sectors:

• a. agriculture, plantation and forestry;
• b. animal husbandry, hunting or catching, or catching ; or
• c. fishery, from either fishing or cultivation, which is taken, tapped directly from their sources, including those initially processed for the purpose of extension of the storage age or facilitation of further process as stipulated in the attachment to this government regulation.

3. Abolished

2. The provision in article 2 paragraph (1) is amended by supplementing a sub-paragraph f and the provision in article 2 paragraph (20 sub-paragraph c is amended so that article 2 entirely reads as follows:

Article 2

(1) The import of certain strategic taxable goods in the form of:

• a. the capital goods as described in article 1 point 1 sub-paragraph a which are needed directly in the process of production of taxable goods by taxable goods by taxable entrepreneurs producing the taxable goods;
• b. the animal, fowl and fish freed and/or raw material for making animal, fowl, and fish feed as described in article 1 paragraph 1 sub-paragraph b;
• c. the seeds, and/or parent stocks of agricultural, plantation, forestry, animal husbandry, breeding or fishery products as described in article 1 point 1 sub-paragraph c;
• d. abolished;
• e. abolished;
• f. the agricultural products as described in article 1 paragraph 1 sub-paragraph c, is exempt from value added tax.

(2) the delivery of certain strategic taxable goods in the form of:

• a. the capital goods as described in article 1 point 1 sub-paragraph a, which are needed directly in the process of production of taxable goods by taxable entrepreneurs producing the taxable goods;
• b. the animal, fowl and fish feed and/or raw material for making animal, fowl and fish feed as described in article 1 point 1 sub-paragraph b;
• c. the agricultural products as intended in Article 1 paragraph 1 sub-paragraph c;
• d. the seeds and/or parent stocks of agricultural, plantation, forestry, animal husbandry, breeding or fishery products as described in article 1 paragraph 1 sub-paragraph c;
• e. abolished;
• f. abolished;
• g. the drinking water channeled through pipe by drinking water companies as described in article 1 paragraph 1 sub-paragraph g; and
• h. electricity except for housing with the power of above 6.600 watt (six thousand and sis hundred ) watt as described in article 1 paragrah 1 sub-paragraph h, is exempt from Value Added Tax.

Article II

The government regulation shall come into force as from the date of stipulation and be retroactive to January 1, 2007

For Public cognizance, the government regulation shall be promulgated in statute book of the republic of Indonesia.

Stipulated in Jakarta
On January 8, 2007
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
Signed
DR. H. SUSILO BAMBANG YUDHOYONO