a. that in order to develop machine and appliance industries, it is necessary to drive up the use of machines resulting from domestic production;
b. that industries undertaking the development/expansion by using domestically produced machines can be given additional facility of relief of import duty on the import of goods and materials for the production need on the basis of Article 5 of Decree of the Minister of Finance No. 135/KMK.05/2000;
c. that in the framework of determining the use of domestically produced machines, Domestic Component Level (TKDN) needs to be stipulated;
d. that based on the considerations as meant in letters, b and c, a regulation of the Minister needs to be issued;
1. Law No. 5/1984 on Industry (Statute Book of 1984 No. 22, Supplement to Statute Book No. 3274);
2. Law No. 17/2003 on State Finance (Statute Book of 2003 No. 47, Supplement to Statute Book No. 4286);
3. Government Regulation No. 17/1986 on the Authority to Regulate, Foster and Develop Industries (Statute Book of 1986 No. 23, Supplement to Statute Book No. 3330);
4. Presidential Decree No. 187/M/2004 on the United Indonesia Cabinet as already amended several times and the latest by Presidential Decree No. 20/P/2005;
5. Presidential Regulation No. 9/2005 on the Status, Tasks, Functions, Organizational Structures and Working Arrangement of State Ministries as already amended by Presidential Regulation No. 62/2005;
6. Decree of the Minister of Finance No. 135/KMK.05/ 2000 on Relief of Import Duty on the Import of Machines, Goods and Materials in the Framework of the Development/Expansion of Industries/Service Industries as already amended several times and the latest by Regulation of the Minister of Finance No. 47/PMK.04/2005;
7. Regulation of the Minister of Industry No. 01/M-IND/3/2005 on the Organization and Working Arrangement of the Ministry of Industry and Trade;
THE REGULATION OF THE MINISTER OF INDUSTRY ON THE USE OF DOMESTICALLY PRODUCED MACHINES IN THE FRAMEWORK OF THE UTILIZATION OF FACILITY OF RELIEF OF IMPORT DUTY ON THE IMPORT OF GOODS AND MATERIALS FOR PRODUCTION
Referred to in this regulation as:
1. Machine shall be every kind of machine, machinery, apparatus of factory installation, equipment or tool in the built-up or knocked down condition, which is used for building or developing industries/service industries related to activities of industries/service industries, excluding spare part and component.
2. Domestically produced machines shall be machines produced or worked by industries investing and producing in Indonesia.
3. Industries shall be companies already having business licenses to process raw materials, semi-finished materials and/or finished goods into goods having higher value for use, including designing and engineering of industries.
(1) Industries undertaking the development/expansion by using domestically produced machines shall obtain the additional relief of import duty as regulated in Article 5 of Decree of the Minister of Finance No. 135/KMK.05/2000.
(2) The industries as meant in paragraph (1) shall have Domestic Component Level (TKDN) of 30% (thirty percent) at the minimum.
(1) TKDN as meant in Article 2 paragraph (2) shall be counted on the basis of comparison of the price of the whole series of production machine subtracted by the price of imported components to the price of the whole series of production machines.
(2) The price of the whole series of production machines shall be a cost spent for making series of production machines covering cost of direct goods (materials), equipment, project management and engineering, working tools/facilities, construction and fabrication as well as general services.
(3) The calculation of TKDN and example of the calculation shall be as contained in Attachments I and II to this regulation.
(1) Industries planning to utilize the additional facility of relief of import duty as ment in Article 2 paragraph (1) shall submit application for self assessment of TKDN to the Director General of Machine Industry Development.
(2) The application for verification of TKDN as meant in paragraph (1) shall be accompanied by:
(3) Based on the application as meant in paragraph (1), the Director General of Machine Industry Development can appoint surveyor to verify.
(4) Costs arising from the implementation of the verification can be charged with the industries as meant in paragraph (1).
(5) Results of the verification as meant in paragraph (3) shall be mentioned in the form of Report on Verification of TKDN.
(6) The Director General of the Related Industry Development shall issue recognition of TKDN to the Report on Verification of TKDN as meant in paragraph (5).
The regulation shall come into force as from the date of stipulation.
For public cognizance, the regulation shall be published by placing it in State Gazette of the Republic of Indonesia.
Stipulated, in Jakarta
On February 14, 2006
THE MINISTER OF INDUSTRY
(signed)
FAHMI IDRIS
ATTACHMENT I TO REGULATION OF THE MINISTER OF INDUSTRY
NO. 10/M-IND/PER/2/2006
CALCULATION OF DOMESTIC COMPONENT LEVEL (TKDN) IN THE FRAMEWORK OF INVESTMENT
ATTACHMENT II TO REGULATION OF THE MINISTER OF INDUSTRY
NO. 10/M-IND/PER/2/2006
EXAMPLE OF COMPONENTS OF COSTS IN THE CALCULATION OF DOMESTIC COMPONENT LEVEL (TKDN)
IN THE FRAMEWORK OF INVESTMENT