DECISION OF DIRECTOR GENERAL OF CUSTOMS AND EXCISE
No. KEP-44/BC/2000

0N
PROCEDURE FOR GRANTING RELIEF OF IMPORT DUTY ON IMPORT OF
RAW MATERIALS/SUB COMPONENTS/AUXILIARY MATERIALS
FOR MANUFACTURING ELECTRONIC COMPONENTS
BASED ON THE DECREE OF THE MINISTER OF FINANCE
No. 98/KMK.05/2000 DATED MARCH 31, 2000

THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE,

Attachment

Considering:

• a. that with a view to enhancing public service in building/developing the domestic industry, it is necessary to grant reduction of import duty on basic materials/sub components/auxiliary materials;
• b. that the granting of import duty reduction shall take account of the rights and interests of the state;
• c. that based on the considerations as meant in letters a. end b. above, it is necessary to stipulate a decision of the Director General of Customs and Excise on the procedure for the granting of reduction of import duty on basic materials/sub components/auxiliary materials for manufacturing electronic components.

In view of:

• a. Law No. 10/1995 on customs affairs (Statute Book/1995 No. 75, Supplement to Statute Book No. 3612);
• b. The Decree of the Minister of Finance No. 440/KMK.05/1996 dated June 21, 1996 on the system of classifications of goods and taridds on import goods as already amended and supplemented the latest by the Decree of the Minister of Finance No. 569/KMK.01/1999;
• c. The Decree of the Minister of Finance No. 98/KMK.01/2000 dated March 31, 2000 on the reduction of import duty on basic materials/subcomponents/ auxiliary materials for manufacturing electronic components.

DECIDES:

To stipulate:

THE DECISION OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE ON PROCEDURE FOR GRANTING RELIEF OF IMPORT DUTY ON IMPORT OF RAW MATERIALS/SUB COMPONENTS/AUXILIARY MATERIALS FOR MANUFACTURING ELECTRONIC COMPONENTS BASED ON THE DECREE OF THE MINISTER OF FINANCE No. 98/KMK.05/2000 DATED MARCH 31, 2000.

Article 1

The import of basic materials/sub components/auxiliary materials for manufacturing electronic components by electronic component industrial companies shall be granted the facility of import duty reduction with the following provisions:

• 1. Basic materials/sub components/ auxiliary materials for manufacturing electronic components shall have their import duty rates reduced so that the final tariff becomes 5% (five percent);
• 2. In the case of the import duty rates contained in the Customs Tariff Book of Indonesia (BTBMI) being 5% (five percent) or lower, the rates in BTBMI shall apply.

Article 2

The types and specifications as well as quantities of basic materials/sub components/auxiliary materials eligible for the import duty reduction facility shall be based on the list of basic materials/sub components/auxiliary materials for annual production stipulated by the Minister of Industry and Trade.

Article 3

(1) In order to obtain the facility as meant in Article 1, electronic component industrial companies shall submit applications to the Director General of Customs and Excise for the attention of the Director of Customs Facilities according to the model in Attachment I to this decision, by attaching:

• a. photocopies of taxpayer code numbers (NPWP) already legalised by the relevant agency or showing original documents to officials of the Directorate of Customs Facilities;
• b. photocopies of electronic component industrial business licences already legalised by the relevan Ministry/agency or showing original documents to officials of the Directorate of Customs Facilities;
• c. original letters of verification from the Ministry of Industry and Trade of the need for basic materials/Sub components/auxiliary materials for 1 (one) production year;
• d. lists of goods covering types of goods, originating countries, ports of unloading, technical specification quantities and values of goods according to the model in Attachment II to this decision.

(2) In the case of the applications as meant in paragraph (1) fulfilling the requirements, the Director of Customs Facilities for the Director General of Customs and Excise on behalf of the Minister of Finance shall issue decisions on import duty reduction for 1 (one) year production with an import period of 1 (one) year as from the dates of decisions on reduction of import duty on basic materials/sub components/ auxiliary materials, according to the model in Attachment III to this decision with lists of basic materials/ sub components/ auxiliary materials and unloading ports attached.

Article 4

Electronic component industrial companies obtaining the import duty reduction facility shall be obliged:

• (1) to maintain account books of imports of basic materials/sub components/auxiliary materials for customs auditing;
• (2) to keep and preserve account books, documents and other records connected with the granting of import duty reduction for at least 10 (ten) years as from the realisation of imports in their places of business;
• (3) to submit reports on realisation of imports of basic materials/sub components/auxiliary materials granted the import duty reduction facility to the Director General of Customs and Excise as meant in the Decision of the Director General of Customs and Excise No. KEP-50/BC/1999 dated August 16, 1999.

Article 5

(1) The basic materials/sub components/auxiliary materials already granted the import duty reduction facility as meant in Article 3 paragraph (2), in the case of failure upon their import in meeting the provisions on quantities, types and specifications of goods as stipulated on the list of basic materials/sub components/auxiliary materials, shall be subjected to import duty and other import levies without fines.

(2) The basic materials/ sub components/ auxiliary materials already granted the said import duty reduction facility shall only be used to meet the needs of relevant industrial companies.

(3) Any abuse of the basic materials/sub components/auxiliary materials as meant in paragraph (1) shall lead to cancellation of the import duty facility granted to the goods so that the import duty owed shall be paid and subjected to a fin of 100% (a hundred percent) of the shortage of import duty.

Article 6

(1) In order to safeguard the financial rights of the state and guarantee compliance with the customs and excise provisions in force, the Directorate General of Customs and Excise shall audit the account books, records, and document relating to the entry, use and release of supplies.

(2) Based on results of the audit as meant in paragraph (1), electronic component industrial companies shall be responsible for the settlement of any import duty and excise due as well as any administrative sanction in the form of fines.

Article 7

Electronic component industrial companies which have already obtained the facility of exemption from import duty on basic materials/sub components/auxiliary materials for manufacturing electronic components based on former provisions and have not yet realised all their imports can continue to apply the decisions on the customs facility based on the former provisions until the expiration of the relevant decisions, on the condition that they shall not be extended and or amended.

Article 8

This decision of the Director General of Customs and Excise shall come into force as from the date of stipulation.

For public cognizance, this decision of the Director General of Customs and Excise shall be announced by publishing it in the State Gazette of the Republic of Indonesia.

Stipulated in Jakarta.
On June 30, 2000
THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE,
sgd
R.B. PERMANA AGUNG D.

Attachment to DECISION OF DIRECTOR GENERAL OF CUSTOMS AND EXCISE
No. KEP-44/BC/2000