REGULATION OF THE MINISTER OF FINANCE
No. 31/PMK.03/2008

CONCERNING
THE FOURTH AMENDMENT TO DECREE OF THE MINISTER OF FINANCE No. 155/KMK.03/2001 CONCERNING EXEMPTION FROM VALUE ADDED TAX ON THE IMPORT AND/OR DELIVERY OF CERTAIN STRATEGIC GOODS

THE MINISTER OF FINANCE,

Considering:

That following the promulgation of Government Regulation No. 31/2007 concerning the Fourth Amendment to Government Regulation No. 12/2001 concerning Import and/or Delivery of Certain Strategic Taxable Goods Exempt from Value Added Tax regulates that the import and/or delivery of agricultural products are exempt from Value Added Tax, so that it is necessary to stipulate a regulation of the Minister of Finance concerning the Fourth Amendment to Decree of the Minister of Finance No. 155/KMK.03/2001 concerning Exemption from Value Added Tax on the Import and/or Delivery of Certain Strategic Taxable.Goods;

In view of:

1. Law No. 6/1983 concerning Taxation General Provisions and Procedures (Statute Book No. 49/1983, Supplement to Statute Book No. 3262) as amended several times, the latest by Law No. 28/2007 (Statute Book No. 85/2007, Supplement to Statute Book No. 4740);

2. Law No. 8/1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (Statute Book No. 51/1983, Supplement to Statute Book No. 3264) as amended several times, the latest by Law No. 18/2000 (Statute Book No. 128/2000, Supplement to Statute Book No. 3986);

3. Government Regulation No. 143/2000 concerning the Implementation of Law No. 8/1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods as amended several times, the latest by Law No. 18/2000 (Statute Book No. 259/2000, Supplement to Statute Book No. 4061) as amended by Government Regulation No. 24/2002 (Statute Book No. 49/2002, Supplement to Statute Book No. 4199);

4. Government Regulation No. 12/2001 concerning the Import and/or Delivery of Certain Strategic Taxable Goods Exempt from Value Added Tax (Statute Book No. 24/2001, Supplement to Statute Book No. 4083) as amended several times, the latest by Government Regulation No. 31/2007 (Statute Book No. 49/2007, Supplement to Statute Book No. 4726);

5. Presidential Decree No. 20/P/2005;

6. Decree of the Minister of Finance No. 155/KMK.03/2001 concerning Exemption from Value Added Tax on the Import and/or Delivery of Certain Strategic Taxable Goods as amended several times, the latest by Regulation of the Minister of Finance No. 11/PMK.03/2007;

HAS DECIDED:

To stipulate:

THE REGULATION OF THE MINISTER OF FINANCE CONCERNING THE FOURTH AMENDMENT TO DECREE OF THE MINISTER OF FINANCE No. 155/KMK.03/2001 CONCERNING EXEMPTION FROM VALUE ADDED TAX ON THE IMPORT AND/OR DEUVERY OF CERTAIN STRATEGIC GOODS

Article I

Several provisions in Decree of the Minister of Finance No. 155/KMK.03/2001 concerning Exemption from Value Added Tax on the Import and/or Delivery of Certain Strategic Taxable Goods as amended several times by Decrees of the Minister of Finance and/or Regulation of the Minister of Finance:

• 1. No. 363/KMK.03/2002;
• 2. No. 371/KMK.03/2003;
• 3. No. 11/PMK.03/2007,
• shall be amended as follows:

1. The provisions in Article 1 shall be amended by supplementing 1 (one) paragraph namely paragraph i, and supplementing two paragraphs, namely paragraph 5 and paragraph 6 so that Article 1 reads as follows:

"Article 1

In this Regulation of the Minister of Finance:

1. Certain strategic taxable goods shall be:

• a. capital goods in the form of machines and factory equipment in an installed or broken 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 parentstocks 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 above 6,600 (six thousand and six hundred) watts; and
• i. Propietary modest flat (RUSUNAMI).

2. The agricultural products as intended in paragraph 1 c shall be goods resulting from business activities in the following fields:

• a. agriculture, plantation and forestry;
• b. animal husbandry, hunting or catching, breeding; 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 Government Regulation No. 7/2007.

3. abolished.

4. abolished.

5. The proprietary modest flat (RUSUNAMI) as intended in paragraph 1 i shall be story building build in an environment for use as place of inhabitance, equipped by bathroom/water closet and kitchen, whether united with inhabitance unit or separate from communal use, whose acquisition is financed by subsidized or non-subsidized house ownership credit that meet the following provisions:

• a. the floor space of every inhabitance unit more than 21 m2 (twenty one square meters) but less than 36 m2 (thirty six square meters);
• b. the selling price of every inhabitance unit does not exceed Rp 144,000,000 (one hundred and forty four million rupiahs);
• c. the inhabitance unit is designated to individuals earning income not more than Rp 4,500,000 (four million and five hundred thousand rupiahs) per month and have tax-payer code number (NPWP);
• d. the development refers to the Regulation of the Minister of Public Works ruling the technical requirements for the development of modest flat; and
• e. the inhabitance unit constitutes the first inhabitance unit owned, used directly as residence and not be transferred in a period of 5 (five) years as from the date of acquisition.

6. Include in the definition of Rusunami shall be Rusunami as intended in point 5, which is given up to bank in the framework of sharia based financing that meets the following provisions:

• a. the house is purchased by the bank with a view of reselling to public in the framework of sharia based financing;
• b. the house must be resold to public in a period of 6 (six) months as from the date of purchase."

2. The provision in Article 4 shall be amended by supplementing 1 (one) paragraph namely paragraph (3) so that Article 4 reads as follows:

"Article 4

(1) The import and/or delivery of the strategic taxable goods as intended in Article 1 paragraph 1 a, b, c, and d shall be exempt from Value Added Tax.

(2) The delivery of the strategic taxable goods as intended in Article 1 paragraph 1 g and h shall be exempt from Value Added Tax.

(3) The delivery of the certain strategic taxable goods as intended in Article 1 paragraph 1 i by developers or banks in the framework of sharia based financing shall be exempt from Value Added Tax."

3. The provision in Article 5 paragraph (6) shall be amended and 1 (one) new paragraph is supplemented between paragraph (2) and paragraph (3) so that Article 5 reads as follows:

"Article 5

(1) Taxable entrepreneurs importing and/or receiving the strategic taxable goods as intended in Article 1 paragraph 1 a shall have Certificate of Exemption from Value Added Tax issued by the Director General of Taxation.

(2) Individuals or bodies importing and/or receiving the strategic taxable goods as intended in Article 1 paragraph 1 b, c, and d, and/or receiving the strategic taxable goods as intended in Article 1 paragraph 1 g and h shall not be obliged to have Certificate of Exemption from Value Added Tax issued by the Director General of Taxation.

(2a) Individuals or banks receiving the delivery of the certain strategic taxable goods as intended in Article 1 paragraph 1 i, in the framework of sharia based financing shall not be obliged to have Certificate of Exemption from Value Added Tax, which is issued by the Director General of Taxation.

(3) Application for securing the Certificate of Exemption from Value Added Tax as intended in paragraph (1) shall be submitted to the Director General of Taxation by enclosing documents of the import and/or purchase.

(4) Based on the application for Certificate of Exemption from Value Added Tax, the Director General of Taxation shall make decision in not later than 5 (five) working days after the complete application is received.

(5) The import of the certain strategic taxable goods exempt from Value Added Tax not requiresTax Payment Form.

(6) Notification of Imported Goods (PIB) of the taxable goods as intended in paragraph (5) shall be labeled with "VAT IS EXEMPT IN ACCORDANCE WITH GOVERNMENT REGULATION No. 12/2001 AS AMENDED SEVERAL TIMES, THE LATEST BY GOVERNMENT REGULATION No. 31/2007" by the Directorate General of Customs and Excise."

4, The provision in Article 6 is amended so that the Article 6 reads as follows:

"Article 6

(1) Individuals or bodies giving up the strategic taxable goods exempt from Value Added Tax as intended in this regulation shall report their businesses to the Director General of Tax for validation as Taxable Entrepreneurs in accordance with effective taxation provisions.

(2) Excluding from the provision as intended in paragraph (1), individuals or bodies solely giving up the strategic taxable goods as intended in Article 1 paragraph g or h, shall not be obliged to report their business for validation as taxable entrepreneur.

(3) The taxable entrepreneurs as intended in paragraph (1) shall issue Tax Invoice and stamped "VAT IS EXEMPT IN ACCORDANCE WITH GOVERNMENT REGULATION No. 12/2001 AS AMENDED SEVERAL TIMES, THE LATEST BY GOVERNMENT REGULATION No. 31/2007"."

5. Two articles are supplemented to become Articles 6A and 6B, which read as follows:

"Article 6A

(1) The exemption from Value Added Tax on the delivery of the certain strategic taxable goods as intended in Article 4 paragraph (3) shall be granted to individuals obliged to have or make:

• a. certificate from employer about the amount of income received every month, in case of buyers being employee;
• b. statement about the amount of income received every month, in case of buyers executing freelance work;
• c. statement that the house is the first inhabitance unit owned and used directly as residence.

(2) The documents as intended in paragraph (1) shall be given up to banks providing house ownership credit upon submitting application for house ownership credit.

Article 6B

(1) The delivery of the certain strategic taxable goods as intended in Article 1 paragraph 1 i, which fails to meet the provision as intended in Article 1 paragraph 5 shall be subject to Value Added Tax.

(2) Unless developers or banks undertaking the delivery as intended in paragraph (1) in the framework of sharia based financing collect Value Added Tax, the value added tax shall be collected by underpaid tax assessment."

6. The provision of Article 8 is amended so as to read as follows:

"Article 8

(1) In the event that the certain strategic taxable goods as intended in Article 1 paragraph 1 a, which are exempt from Value Added Tax, are not used in accordance with the original purpose or are transferred to other party partly or wholly in a maximum period of 5 (five) years as from the import and/or acquisition, value added tax already exempt shall be paid in one month as from the strategic taxable goods change in the utilization or are transferred.

(2) In the event that the certain strategic taxable goods as intended in Article 1 paragraph 1 i which are given up to individuals, are not used in accordance with the original purpose or are transferred to other parties partly or wholly in not later than 5 (five) years as from the date of acquisition, value added tax already exempt shall be paid in one month as from the date when the strategic taxable goods change in the utilization or are transferred.

(3) In the event that the certain strategic taxable goods as intended in Article 1 paragraph 1 i which are given up to banks in the framework of sharia based financing fail to meet the provision as intended in Article 1 paragraph 6, value added tax already exempt shall be paid in one month as from the date when the provision as intended in Article 1 paragraph 6 is not fulfilled.

(4) The Director General of Taxation can issue underpaid tax assessment to the taxable entrepreneurs as intended in paragraph (1), individuals as intended in paragraph (2) and banks as intended in paragraph (3) that fail to meet the provision as intended in the above paragraphs.

(5) Paid Value Added Tax as intended in paragraph (1), paragraph (2), paragraph (3) and paragraph (4) is Input Tax which can not become as reduction."

Article II

The regulation shall come into force on the date of stipulation and be retroactive to May 1, 2007.

For public cognizance, this Ministerial Regulation shall be published by placing it in the State Gazette of the Republic of Indonesia.

Stipulated in Jakarta
On February 19, 2008
THE MINISTER OF FINANCE,
signed,
SRI MULYANI INDRAWATI