GOVERNMENT REGULATION
No. 31/2007

CONCERNING
THE FOURTH 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 REPUBLIC INDONESIA,

Considering:

• a. That in the framework of ensuring the availability of basic need of the people in the form of feasibly inhabited house as affordable price, the government launched a private-proprietary modest flat development/provision program;
• b. That in the order to support the proprietary modest flat development/program as described in sub-paragraphparagraph a in urban areas and drive up national development, it is necessary to provide special taxation treatment in the value added tax field;
• c. That in order as provide equal treatment for all entrepreneurs, the provision on taxation relief for entrepreneurs giving up certain taxable goods in the form of electricity, water and agricultural produces is not needed anymore;
• d. That based on the consideration as described in sub-paragraphs a, b and c as well as in the framework of implementing the provision in article 16B of law No. 8/1983 on value added tax on goods and services and sales tax on luxury goods as had already been amended several times and the latest by law No. 18/2000, it is necessary to stipulated the fourth amendment to government regulation No. 12/2001 on the import or delivery certain strategic taxable goods exempt from value added tax;

In view of:

• 1. Article paragraph (2) of the constitution of 1945;
• 2. Law No. 6/1983 on taxation general provision and procedures (Statue Book of 1983 No. 49, Supplement to statue Book No. 3262) as has already been amended several times and the latest by law No. 6/1983 concerning taxation general provision and procedures (Statute Book No. 3984);
• 3. Law No. 8/1983 on Value added 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 (Statute Book of 2000 No. 128, Supplement to Statute Book No. 3986);
• 4. Government Regulation No. 12/2001 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. 7/2007 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 (Statute Book of 2007 No. 23, Supplement Book No. 4697);

HAS DECIDED:

To stipulated:

THE GOVERNMENT REGULATION ON THE FOURTH AMENDEMENT TO GOVERNMENT REGULATION NO. 12/2001 ON THE IMPORT AND/OR DELIVERY OF CERTAIN STRATEGIC TAXABLE GODS EXEMPT FROM VALUE ADDED TAX.

Article 1

Several provision in Government regulation No. 12/2001 on the Import and/or Delivery of Certain Strategic Taxable Goods Exempt from Value Added tax (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, Supplement to Statute Book No. 4315);

3. Government Regulation No. 7/2007 on the third Amendment to Government (Statute Book of 2007 No. 23, Supplement to Statute Book No. 4315); shall be amended as follows;

"1. The provision in article 1 paragraph 1 shall be amended by supplementing a new sub-paragraphsub-paragraph, namely sub-paragraphsub-paragraph i and one new paragraphparagraph, paragraph 4 is abolished so that article 1 entire reads as follows;

Article 1

Referred to in this government regulation as:

1. Strategic goods subject to tax are:

• a. capital goods in the form of machine and factory equipment in an installed or braked down conditions, excluding spare parts;
• b. feed of animal, fowl and fish and/or raw material for making animal, fowl and fish feed;
• c. agriculture product;
• d. seeds and/or parent stocks of agricultural, plantation, forestry, animal husbandry, breeding or fishery product;
• e. deleted;
• f. deleted;
• 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;
• i. proprietary modest flat (RUSUNAMI).

2. Agriculture product shall be goods resulting from business activities in the following sectors;

• a. agriculture, plantation and forestry;
• b. animal husbandry, haunting 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 this government regulation.

3. deleted.

4. Proprietary modest flat, hereinafter called RUSUNAMI is a story built in an environment, which is used as inhabitance place, finished by bathroom/WC and kitchen, whether united with inhabitance unit or separate from communal use, whose acquisition is financed through subsidized house ownership credits that comply with the following provision ;

• a. size of every inhabitance unit exceeding 21 m2 (twenty one square meters);
• b. selling price of every inhabitance unit not exceeding Rp. 144.000.000.00 (one hundred and forty four million rupiahs).
• c. designated it individuals having income not exceeding Rp. 4.500.000.00 (four million and five hundred thousand rupiahs) per month and already having Taxpayer Code Number (NPWP);
• d. the development refers to a regulation of the minister of public works ruling technical requirements for development of modest flat; and
• e. being the first inhabitance unit owned, used directly as inhabitance and not transferred in a period of 5 (five) as from the date when the unit is owned."

2. The provision in article 2 paragraph (2) shall be amended by supplementing one sub-paragraph, namely sub-paragraphsub-paragraph i so that article 2 entirely as follow ;

"Article 2

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

• a. the capital goods as described in article 1 paragraph 1 sub-paragraphsub-paragraph a, which are needed directly in the process of producing the taxable goods;
• b. the animals, fowl and fish feed and/or raw materials for making animal, fowl and fish feed as intended in article 1 paragraph 1 sub-paragraphsub-paragraph b;
• c. the seed and/or parent stocks of agricultural, plantation, forestry, animal husbandry, breeding or fishery products as described in article 1 paragraphparagraph 1 sub-paragraphsub-paragraph c;
• d. deleted;
• e. deleted;
• f. the agricultural products as described in article 1 paragraphparagraph 1 sub-paragraphsub-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 paragraphparagraph 1 sub-paragraphsub-paragraph a, which are needed directly in the process of production the taxable goods by taxable entrepreneurs producing the taxable goods;
• b. the animals, fowl and fish feed and/or raw materials for making animal, fowl and fish feed as described in article 1 paragraphparagraph 1 sub-paragraphsub-paragraph b;
• c. the agricultural products as described in article in paragraphparagraph 1 sub-paragraphsub-paragraph c;
• d. the seed and/or parent stocks of agricultural, plantation, forestry, animal husbandry, breeding or fishery products as described in article 1 paragraphparagraph 1 sub-paragraphsub-paragraph c;
• e deleted;
• f. deleted;
• g. the drinking water channeled through pipe by drinking water companies as described in article 1 paragraphparagraph 1 sub-paragraphsub-paragraph g;
• h. electricity except for housing with the power of above 6,600 watt (six thousand and six hundred) watt as described in article 1 paragraphparagraph 1 sub-paragraphsub-paragraph h; and
• i. RUSUNAMI as described in Article 1 paragraph 1 sub-paragraph i is exempt from value added tax."

3. A new article shall be supplement between article 4 and 5 to become article 4A reading as follows:

"Article 4A

(1) In the event that the certain taxable goods as described in article 1 paragraph 1 sub-paragraph i Exempt from value added tax turn out to be used for purpose not suitable to the original purpose or handed over to other partly or wholly in 5 (five) years or less as from the date of acquisition, the exempt value added tax must be paid in one month as from of the change in the use or the transfer of the certain strategic taxable goods and the relevant is subjected to sanctions in accordance with the provisions of legislation..

(2) In the case of the exempt value added tax being not paid in the one month period as intended in paragraph (1) the director general of taxation shall issue underpaid tax assessment plus sanction in accordance with the provision of legislation.

(3) The paid value added tax as intended in paragraph (1) shall not be creditable for input tax."

4. Article 6 is abolished.

Article II

The government regulation shall come into force as from the date of promulgation.

For public cognizance, the government regulation shall be published in statute book of the Republic of Indonesia.

Stipulated in Jakarta
On May 1, 2007
THE PRESIDENT OF THE REPUBLIC INDONESIA
Signed
DR. H. SUSILO BAMBANG YUDHOYONO