REGULATION OF THE MINISTER OF FINANCE
No. 106/PMK.04/2007

CONCERNING
EXEMPTION OF IMPORT DUTY AND/OR EXCISE OF REIMPORT EXPORTING GOODS

MINISTER OF FINANCE,

Considering:

That in the framework of implementing the provision of Article 25 paragraph (1) sub-paragraph o, Law No. 17/2006 concerning Amendment to Law No. 10/1995 concerning Customs Affair, it is necessary to stipulate a Regulation of the Minister of Finance concerning Exemption of Import Duty and/or Excise of Reimport Exporting Goods

In view of:

• 1. Law No. 10/1995 concerning Customs (Statute Book of Republic of Indonesia Year 1995 No. 75, Supplement to Statute Book No. 3612) as has already been amended by Law No. 17/2006 (Statute Book of Republic of Indonesia Year 2006 No. 93, Supplement to Statute Book No. 4661);
• 2. Law No. 11/1995 concerning Excise (Statute Book of Republic of Indonesia Year 1995 No. 76, Supplement to Statute Book No. 3613);
• 3. Presidential Decree No. 20/P/2005;

HAS DECIDED:

To stipulate:

THE REGULATION OF THE MINISTER OF FINANCE CONCERNING EXEMPTION OF IMPORT DUTY AND/OR EXCISE OF REIMPORT EXPORTING GOODS

Article 1

In this Regulation of the Minister of Finance, the meaning of:

• 1. Reimport existing goods referred to import again to customs area of exporting goods:
• a. in same quality;
• b. for repairing;
• c. for processing; or
• d. for testing.
• 2. In same quality referred to goods do not get any processing, like goods are brought by passengers to go abroad, for exhibition, show, competition, do project abroad, exporting goods are rejected abroad or because something reason should be reimported;
• 3. For repairing referred to handling damage or old goods become like existing condition without change their basic characteristic.
• 4. For processing referred to handling goods not only repairing, also increase price of goods in economically, without change their basic characteristic.
• 5. For testing referred to handling goods to check of technical, quality and capacity based on decided standard.
• 6. Head of Office referred to Head of Customs and Excise Service Office.

Article 2

(1) Reimport of goods as intended in Article 1 paragraph 1 sub-paragraph a get exemption for import duty and/or excise.

(2) Exception of exemption as intended in paragraph (1) of reimport goods as intended in Article 1 paragraph 1 point a is good was imported first get facility of exemption of imported good and get restitution of import duty and/or excise or liquidation of guarantee. It subject to import duty/excise equal with facility which is gotten by importer.

(3) Reimport of goods as intended in Article 1 paragraph 1 point b and point c is subject of import duty and/or excise for replacement or additional parts and repairing cost include transportation cost and insurance.

(4) Reimport of goods as intended in Article 1 paragraph 1 point d get exemption from import duty and/or excise.

Article 3

(1) Calculation of import duty as intended in Article 2 paragraph (4) based on:

• a. tariff rate of good in finished condition; and
• b. customs value for calculation of import duty follow provision to calculate customs value.

(2) Calculation of import duty as intended in paragraph (1) follow sample as stipulated in Attachment to this Regulation of the Minister of Finance.

Article 4

(1) To get exemption of import duty and/or excise for imported goods as intended in Article 2, importer propose proposal to Head of office with description of sum and kind of goods and customs value which asked exemption of import duty and/or excise, with attachments:

• a. Copy of Declaration of Exporting Goods (PEB), Export approval and/or Investigation Result Report or Surveyor report or Evidence of Export for who not should give PEB;
• b. Invoice which stated replacement/additional parts and/or repairing/processing cost, special for goods as intended in Article 1 paragraph 1 sub-paragraphs b and c;
• c. Bill of Lading or Sea Way Bill or Air Way Bill at export and import; and
• d. Explanation letter from other party abroad which describe about reason to return exporting goods in same quality as intended in Article 1 paragraph 1 sub-paragraph a, or testing result explanation letter for goods which reimported as intended in Article 1 paragraph 1 sub-paragraph d.

(2) In case proposal as intendedintended in paragraph (1) get approval, Head of office issues decision letter of exemption of import duty and/or excise for reimport of exporting goods.

(3) In case proposal as intended in paragraph (1) was rejected, head of office issue rejection letter.

Article 5

(1) To process reimport goods as intended in Article 4 use customs declaration of importing goods follow regulations to release importing goods to be used.

(2) Provision as intended in paragraph (1) for release of reimporting goods of excisable goods, use provisions about excise.

Article 6

Following the enforcement of this regulation, Regulation of the Minister of Finance No. 133/KMK.05/1997 concerning Exemption or Relief of Import Duty and Excise for Import of Goods Reimported of exported goods , shall be revoked and declared null and void.

Article 8

This Regulation of the Minister of Finance shall come into force since 30 (thirty) days after date of stipulation.

For public cognizance,it is ordered that this Regulation shall be published in the State Gazette of the Republic of Indonesia.

Stipulated in Jakarta
On September 5, 2007
THE MINISTER OF FINANCE
Signed
SRI MULYANI INDRAWATI

ATTACHMENT
SAMPLE OF CALCULATION OF CUSTOMS VALUE FOR IMPORT DUTY OF REIMPORT GOODS WHICH IMPORTED FOR REPAIRING AND PROCESSING

Calculation for import duty of reimport goods which imported for repairing and processing use formula:

I. Payment of import duty for reimported goods = A x NT for Repairing or Processing

II. A = % BM (1 - NE/NT)

Remarks:

• - A = Multiplification factor
• - NT (Total Value) = Total Value of imported goods
• = NE + Value of replacement/additional goods + Repairing Cost + Freight from abroad to port + Insurance.
• - NE (Export Value) = Export value is stated in Declaration of Exporting Goods

Sample of Calculation:

• - Company A in Jakarta reimported repaired good in Company B in Tokyo, it is TV Flattron Sony 56 inch, that is changed its CRT, its price is USD 400.00
• - TV price in CBU condition in invoice of Company B in Tokyo FOB USD 460.000 (include replacement good/CRT USD 50 and repairing cost USD 10). Freight from Tokyo to Jakarta is USD 35.00, Insurance USD 5.00, Import Duty tariff of TV is 5% (for example). NDPBM USD 1 = Rp. 9,000.00

Calculation:

• - NE = USD 400.00 x Rp.9,000.00
• = Rp.3,600,000.00
• - NT = (USD400.00 + USD 50.00 + USD 10.00 + USD 35.00 + USD 5.00) x Rp.9,000.00 = Rp.4,500,000.00
• - A = 5% x (1 - 3,600,000/4,500,000)
• = 1%
• - Payment of Import duty of reimport for repairing or processing = 1% x Rp.4,500,000.00 = Rp.45,000.00

SAMPLE OF CALCULATION IMPORT DUTY OF REIMPORT EXPORTING GOODS TO BE REPAIRED AND PROCESSED

Calculation of import duty for reimport exporting goods to be repaired and processed use Formula:

Import Duty = tariff rate of Import Duty x (NB + Repairing Cost + Transportation Cost + Insurance) x NDPBM

Notes:

• NB: Value of replacement/added goods.
• Transportation cost is Cost to bring goods from abroad to destination port.
• NDPBM: basic value for calculation of import duty

Sample of Calculation:

Company A in Jakarta reimport good which repaired in Company B in Tokyo, the good is Gas Chromatography (GC) which should be repaired by change its coloum.

Coloum price in Company B in Tokyo FOB is USD 2,000.00, repairing cost is USD 1,000.00, transportation cost from Tokyo to Jakarta is USD 500.00, Insurance is USD 300.00, Import Duty tariff of GC is 5%, NDPBM 1 USD = Rp 9,000.00

Import Duty = 5% x (FOB USD 2,000.00 + USD 1,000.00 + USD 500.00 + USD 300.00) x Rp 9,000.00 = Rp 1,710,000.00

For reimport goods as intended in:

• a. Article 1 point a, when beginning import did not get exemption of import duty or at export did not get return of import duty and excise, will get exemption of import duty and excise.
• b. Article 1 point a, when in beginning import got exemption of import duty or at export got return of import duty and excise, will be charged import duty and excise as much as facility which received by importer.
• c. Article 1 point a, from bonded zone will get exemption of import duty and excise while bring back again to bonded zone.
• d. Article 1 point b and c, will charge import duty and excise to replacement or additional parts and repairing cost include transportation and insurance.
• e. Article 1 point d will get exemption of import duty and excise.

MINISTER OF FINANCE
Signed
SRI MULYANI INDRAWATI