CIRCULAR OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE
No. SE-01/BC/2007

CONCERNING
TECHNICAL DIRECTIVES FOR STIPULATION OF RETAIL PRICES OF TOBACCO PRODUCTS, ADDITION TO POSTPONEMENT CEILING OF PAYMENT OF EXCISE ON ORDER OF EXCISE TAPES OF TOBACCO PRODUCTS AND DEADLINE OF AFFIXING AND SORTING OF EXCISE TAPES

DIRECTOR GENERAL OF CUSTOMS AND EXCISE,

To :

Following the stipulation of Regulation of the Minister of Finance No. 118/PMK.04/2006 on the Second Amendment to Regulation of the Minister of Finance No. 43/PMK.04/2005 regarding stipulation of Cost Price and Tariffs of Tobacco Products, Regulation of the Director General of Customs and Excise No. P-24/BC/2006 on the Second Amendment to Regulation of the Director General of Customs and Excise No. 04/BC/2005 on Procedures for Stipulating Retail Prices of Tobacco Products and Decision of the Director General of Customs and Excise No. KEP-127/BC/2006 on Addition to Postponement Ceiling of Payment of Excise on Order of Excise Tapes of Tobacco Products, it is deemed necessary to provide the following matters:

A. calculation and stipulation of Increase in Retail Price.

1. Starting from March 1, 2007, Retail Prices (HJE) of all tobacco products still effective (for domestic sales or export) must be increased by 7 % (seventh percent) per cigarette or gram.

2. in the case of result of calculation of the increased HJE remaining below the minimum HJE as stipulated in Attachment I to Regulation of the Minister of Finance No. 118/PMK.04/2006, the stipulated HJE must be adjusted to the minimum HJE as set forth in Attachment I to Regulation of the Minister of Finance No. 118/PMK.04/2006.

Calculation of increase in HJE:

New HJE: {(HJE per package divided by Content per package) multiplied by 107%} multiplied by content per package. Result of calculation per package is rounded up in a fraction of Rp 50.00 (fifty rupiahs).

For example :

3. pursuant to article 11 of Regulation of the Director General of customs and excise No. 07/BC/2005, heads of customs and excise service offices promptly stipulates the increase in HJE as described in paragraphs 1 and 2 by issuing a decision of stipulation of the increase in HJE without application from manufacturers/ importers of tobacco products with the provision that the stipulation of the increase in HJE comes into force as from March 1, 2007.

4. The decision of stipulation of the increase in HJE as described in paragraph 3 must be issued in not later than January 31, 2007.

B. Stipulation of HJE of New Brand of Tobacco Products stipulation of HJE of new brands of tobacco products for all kinds of tobacco products;

a. starting form march 1, 2007, HJE MAY not be lower than the minimum HJE as stipulated in attachment I to regulation of the minister of finance No. 118/PMK.04/2006;

b. HJE may not be owned than HJE per cigarette or gram of the same tobacco products and owned by manufacturers/ importers of the said tobacco products still effective.

For example:

Manufacture "PR.AB" belonging to Category II has stipulation of the lowest HJE as much as Rp 5.100 per package of SKT consisting of 12 cigarettes. In the calculation of HJE per cigarette, HJE of SKT belonging to "PR.AB" is Rp 425 per cigarette (Rp 5.100 : 12). In the case of the manufacture planning to submit HJE of new brand of SKT, the minimum HJE is:

- Rp 5.100 (425x12) per package containing 12 cigarettes; or

- Rp 4.250 (452x10) per package containing 10 cigarettes.

C. Addition to Postponement Ceiling of Payment of excise on order of excise tapes of tobacco products

1. To all approval of postponement which had already given to manufacturers/ importers of tobacco products, which remains effective, the postponement ceiling:

2. the addition to the postponement ceiling as intended in paragraph 1 sub-paragraph b is only given to tobacco-product manufacturers/importers producing SKM, SPM or SKT.

3. The addition to postponement ceiling as described in paragraph 1 is given automatically (without application and decision) and directly supplemented to balance of postponement recording book by giving a note "Balance of Postponement is supplemented in accordance with decision of the director general of customs and excise No. KEP-127/BC/2006".

4. Following the provision of addition to the postponement ceiling as described in paragraph 1, validity period of decision on granting of postponement of payment of excise already given remains unchanged.

For example:

D. Deadline of Affixing and Sorting of Excise Tape

1. Excise Tape 2006

2. Excise Tapes Ordered on the Basis of CK-1 January to February 2007 :

E. Miscellany

1. In article I paragraph 2 of regulation of the Director General of Customs and Excise No. P-24/BC/2006, referred to as "Attachment IX to this regulation " is Attachment IX to Regulation of the director General of Customs and Excise No. 07/BC/2005, which had already been changed into attachment V to Regulation of the Director General of Custom and Excise No. P-24/BC/2006.

2. Therefore, Attachment V to Regulation of the Director of Custom and Excise No. p-24/BC/2006 reads Attachment IX to Regulation of the Director General of Customs and Excise No. P-07/BC/2005.

3. Stipulation of HJE referring to Regulation of the minister of finance No. 118/PMK.04/2006, which had already been stipulated by Heads of Custom and Excise service Offices before the issuance of Regulation of the Director of Custom and Excise NO. P-24/BC/2006 must be revoked and the increase in HJE is re-stipulated.

4. Imposition of specific tariff of excise on SKM, SPM and SKT in force, starting from July 1, 2007 does not require tobacco product manufacturers/ importers for increasing retail price.

5. In connection with the imposition of specific tariff of excise as mean in paragraph 3, format of document of excise tape order (CK-1) will be adjusted.

6. Heads of Customs and Excise Service Offices are obliged to observe the deadline of affixing and sorting of excise tape as intended in sub-paragraph D as well as to supervise the implementation.

7. Heads of Regional Offices of the Directorate General of Custom and Excise are obliged to supervise and monitor the implementation of the provisions as intended in this circular.

This is theimplementation in a full sense of responsibility.

Stipulated in Jakarta
On January 16, 2007
THE DIRECTORATE GENERAL
Signed
ANWAR SUPRIJADJI
NIP 120050332

Cc :