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Indonesia Customs Procedures

GENERAL

All goods brought into the Customs Territory shall be treated as imported goods on which the import duties are due.

Customs Territory means the territory of Indonesia covering the land, waters, and air space over them and specified localities in the exclusive economic zone and the continental shelf in which Indonesian Customs Law applies in full.

Customs examination shall be applied for imported goods, in which includes verification of documents and physical inspection. In order to obtain accurate data and to evaluate the lodged Customs Declaration, customs examination shall be carried out upon imported goods through the inspection of the goods and verification of documents. To ensure expeditious flow of goods, the physical inspections shall be done selectively, in a sense that the inspection shall only be focused on imported goods having high risk, such as goods with high import duties, goods that are dangerous to the state and public, and goods imported by "blacklist" importers. In this regard, physical inspection shall only be performed in cases where there are intelligence information, or in such a case when imported goods are selected for examination based on the random sampling automatically determined by computer. The determination will make the goods to be placed under "the green channel" or "the red channel". In case that the goods are classified under "the red channel", they should be physically examined, while if the goods are classified under "the green channel", physical examination would not be required.

Geographically, Indonesia is a huge archipelago state, therefore it is impossible to place the customs official along the seashores to ensure that goods incoming to or outgoing from the Customs Territory have fulfilled the prevailing provisions. Therefore, the fulfillment of Customs formalities shall be done at the Customs Service Office. It means that loading or unloading of goods at any place other than the Customs Service Office shall be regarded as violation againts the Customs Law.

In this way, the control is easier to be done since the place to meet Customs formalities such as the lodgement of the Customs Declaration or payment of import duties has been clearly limited by designating the Customs Service Office in accordance with the trading needs.

However, the fulfillment of Customs formalities at a place other than the Customs Service Office still can be done when certain conditions determined by the Minister of Finance are fulfilled in accordance with trading and economic needs or when such a procedure provides an easier, safer, faster, better and cheaper way to fulfil Customs formalities. Such facilitation is granted on a temporary basis.

Lodgement of Customs Declaration for the fulfillment of Customs formalities may be done in writings or through electronic media such as diskettes or intercomputers direct connection.

TARIFF AND DUTY RATES

Duties and taxes which are applicable to imported goods consist of:

1. Import duty, the rate varies according to the kind of goods imported with a range from 0 to 170%.

2. Value added tax (VAT) with a rate varies from 0 to 10%,

3. Sales Tax on Luxurious Goods (STLG) are either 10%, 20%, 35%, 40% or 50% depending on the kind of goods

4. Income Tax (PPh) is 2.5% for a registered importer and 7.5% for an unregistered importer.

Assesment of import duties and taxes are based on Cost Insurance Freight (CIF) method.

Payment of import duties and taxes mentioned above, shall be done through a foreign exchange bank or via a Customs Service Office during office hours before Customs or import Declaration is submitted. At Tanjung Priok Seaport and Soekarno-Hatta Airport where EDI (Electronic Data Interchange) system is fully implemented, payment of import duties and taxes shall be paid through electronic transfer.

For goods classification purposes, since January 1, 1989 Indonesian Customs has implemented a Tariff Schedule which is based on the Harmonized Commodity Description and Coding System (HS). Under the latest revision (HS 1996 version), Indoneisan Tariff Schedule consists of rules of interpretation, 21 sections, 97 chapters, 5,113 subheadings (6-digits code) and 7,214 national tariff lines (9-digits code).

Indonesian Customs Excise acceded to the HS Convention on May 28, 1993.

VALUING YOUR PRODUCTS

Any person who will import goods may file the tariff classification determining on imported goods prior to the lodgement of the Customs Declaration with form Pre-Entry Classification (PEC) only to the Director General of Customs and Excise (DG). PEC have a binding strength law while the imported good have type and specification to appropriate with the tariff classification determination

Based on the Indonesian Customs Law, the Customs value shall be determined as follows:

1. The Customs value of imported goods shall be the transaction value, that is the price actually paid or payable for the good when sold or export to the country of importation adjusted in accordance with the provision of article 8 agreement on Implementation of article VII of the General Agreement on Tariffs and Trade 1994.

2. If the Customs value of the imported goods cannot be determined under the transaction value method, then the Customs value shall be the transaction value of identical goods.

3. If the Customs value of the imported goods cannot be determined under all mentioned above methods, then the Customs value shall be the transaction value of similar goods.

4. If the Customs value of the imported goods cannot be determined under all mentioned above methods, then the Customs value shall be based on a deductive method

5. If the Customs value of the imported goods cannot be determined under all mentioned above methods, then the Customs value shall be based on a computed method

6. If the Customs value of the imported goods cannot be determined under all mentioned above methods, then the Customs value shall be determined by using reasonable means consistent with the principles and the provisions mentioned under point 1 to 5 above on the basis of available data in the Customs Territory subject to certain limitations.

UNIMPOSITION, EXEMPTIONS, RELIEF AND REFUND OF THE IMPORT DUTY

Import Duties shall not be imposed on goods brought into the Customs Territory for transit or transhipment. In principle, goods from outside Customs Territory are subject to the Import Duties at the time such good are brought into Customs Territory. Considering that these goods are not intended to be imported for home use, the Import Duties are not imposed.

Exemptions of the Import Duty shall be granted for import of:

- goods of foreign countries representatives and their officials who work in Indonesia under reciprocal principles

- goods for international bodies and their officials who work in Indonesia

- goods and materials to be processed, assembled, or installed on other goods destined for export

- scientific books

- goods donated for public worship, charity, social, and cultural purposes

- goods for museum, zoo, and other similar public places

- goods for research and scientific purposes

- goods for the blinds and other disables

- weapons, ammunition, and other military equipment, including spare parts for the national defense and security

- goods and materials used to produce other goods for the national defense and security

- samples of no commercial value

- coffins or other containers containing corpses or ashes of corpses

- removal goods

- goods brought by passengers, crews of means of transport, border crossers, and consignments of a certain Customs value and/or a certain number

Exemption or relief of the Import Duty may also be granted for import of:

- machinery for the establishment and development of industry

- goods and materials for the establishment and development of industry for a specified period of time

- equipment and substances used to prevent environmental pollution

- seeds and breeding animals for the establishment and development of agricultural industry, animal husbandry, or fishery

- marine products caught by licensed hauling vessels

- goods exported to undergo repair, processing, or testing

- goods re-imported in the same state

- goods which are naturally damaged, decreased in quality, destroyed or decreased in volume or weight occurred between the time of transportation on the Customs Territory and the time of import approved for home use

human therapeutic substances, blood grouping and tissue typing reagents

- goods by the Government for public purposes

- goods for temporary admission

The provisions on exemptions, relief and refund shall be further regulated by the Minister of Finance. It should be noted that any person who does not comply with the provisions of the exemption and/or relief of the Import Duties by virtue of Indonesian Customs Law, whenever causing loss of the government revenue, shall be subject to an administrative fine of one hundred percent.

Refund of the Import Duty may be carried out in a whole or in a part of the duty paid for, interalia:

a. Excess payment of the Import Duties, for example an excess payment resulted from Customs determination of tariff classification, or an excess payment caused by an administrative error

b. Excess payment of the Import Duty as a result of the decision of the appeal institution

CLEARING IMPORTS

Imported goods are not legally entered until the vessel has been arrived in the Customs Territory. Prior to the arrival of the aircraft or vessel, the shipping agent should submit a Notice of Estimated Time of Arrival to Customs. Upon the arrival of the vessels, the master or the agent is obliged to lodge a General Declaration in the form of a Manifest covering all cargoes and supplies on board to the Customs Service Office, not later than 24 hours after the arrival.

Imported goods are allowed , commencing from the date of unloading. If the goods are not yet released within a period of more 30 (thirty) days as of the date their storage in the temporary storage, they will be regarded as unclaimed goods. If the unclaimed goods are not yet released within a period of more than 60 days, Customs is empowered to sell such goods by auction.

The proceeds of the auction are used to cover import duties, taxes and accrued charges. The balance of the process of the auction shall become state property if it is not taken by the owner within the period of 90 (ninety) days as the date of notification letter. If it is not claimed by them, the balance will be appropriated for the state revenue.

Goods may be declared by the importer, or the customs broker on his behalf. In order to obtain release of imported goods for home use, the declarant must perform as follows:

1. carry out the import declaration and pay import duty and taxes at the bank or customs office

2. submit import declaration, the security and other supporting documents to Customs.

3. submit complementary customs documents and security

Declaration must be made on an import declaration forms called "Declaration of Importation of Goods" ( PIB ) in which several important information submitted by declarant, such as name address of exporter; name, address status of importer; name address of declarant; name of the vessel; description of goods; value of the goods; etc.

In four main ports (Tanjung Priok I, II, III and Soekarno-Hatta I-II), the declaration should be submitted and processed electronically through the EDI (Electronic Data Interchange) system, while in the other ports it may be done manually or in diskettes media.

By the maximum of 4 (four) hours, importers shall get decision from customs of the PIB which has been submitted, whether the PIB is rejected or received and determining the clearance channel. Customs should give the argument of rejection in the Rejection Note.

Physical inspection or examination will be conducted by Customs at the port of destination in Indonesia, and as mentioned above, will only be performed based on a very selective basis (through determination of red or green channels). With regard to physical inspection, it shall be carried out in the following cases:


1. there are intelligence information determined by computer


2. temporary admission goods


3. re-imported goods

To facilitate physical inspection, Customs Service office at Tanjung Priok Jakarta and Tanjung Perak Surabaya use the Hi Co Scan X-Ray Container. Customs officials can decide if physical inspection is needed or not by translating the Scanner image of that such apparatus.

Imported goods may only be released from the Customs area after the Customs formalities have been fulfilled and the approval from the Customs official has been obtained.

In case of a tariff misclassification or miscalculation on import declaration occurred, the goods can still be released though the shortage of import duties and taxes due on such importation as a result of such mistakes is not paid yet. This is on the condition that such a shortage has to be paid within 30 (thirty) days from the date of the letter of payment shortage declaration of import duties from the date of Reassessment Note issued on such an import declaration.

CLEARING EXPORT

The document for export is called Declaration of Exportation of Goods (PEB). The exporter or Customs broker on his behalf, must submit export declaration and they are responsible for the accuracy of the particulars given in the declaration and the completeness of its supporting documents.

Declaration of Exportation of Goods (PEB) shall not be required by Customs for certain exports activities, for example goods taken out by passengers and crew of means of transport, border crossers, vehicles which are using international document (ATA Carnet, TRIPTIEK, CPD Carnet) consignments by PT Pos Indonesia which are using Declaration En Douane (CN 23).

Basically, for export there should be only documentary examination carried out by Customs. Physical examination will be performed by Customs only in the very special circumstances, as the following cases :

1. Customs fraud

2. Temporary exportation/importation

3. Fraud in VAT (Value Added Tax) and Sales Tax on Luxurious Goods (STLG)

4. Exportation of goods which are subject to Export Tax (PE)

5. Exportation of goods which are using drawback system facilities (BAPEKSTA facility)

Cases arising from condition 4 above are inspected by a government appointed surveyor.

Customs examination shall be performed at the Customs area, at the exporter’s premises or other location used to store export goods. Surveyor examination shall be performed at any place beyond customs area which is determined by exporter.

GOODS WITH PROHIBITIONS, CONTROLS, AND RESTRICTIONS

Goods which are prohibited and restricted from being imported or exported to or from Indonesian territory without the approval of respective authorities :

1. Hazardous articles and substances such as narcotics and dangerous drugs, flammable, poisons, oxidators, radioactives etc.;

2. Explosive goods/materials; all types and sizes of fireworks;

3. Fire-arms and parts thereof and its ammunitions; airgun; spring-gun or gas-operated-gun;

4. Imitation of firearms;light or signal/alarm pistols including parts thereof;

5. Books and certain printed materials (such as books, magazines, leaflets, brochures, newspapers written in Chinese characters and languages; all kind of printed materials in Indonesian language/dialects);

6. Audio/video records in any medias; transceiver equipment; cordless telephone or telecommunication equipment; color photocopy machine and parts thereof;

7. Certain plant species are prohibited for import, such as quinine, orchids; endangered species or their by-products; certain kind of fish are prohibited to export, such as Sidat breed (Anguila sp.) , Panacidae shrimp (Panasidae sp) etc.

8. Unregistered food beverages; ready made medicines produced abroad;

9. Products of certain goods which are prohibited for export, such as product rubber lumps, unprocessed hides and raw skin of cow; rattan rattan core etc.;

10. Pesticides such as DDT and penrachlorophenol and its salts

11. Dangerous waste, such as scraps corrosive iron or steel;

12. Goods of cultural, archaelogical and or historical value;

13. Other fauna - flora under CITES

14. Ozone depleting substance and goods containing ozone depleting substance such as freon for air conditioner or refrigerator with a chemical structure CFC-11, CFC-12 and CFC-13.

15. Certain amount of Rupiah in cash

TEMPORARY ADMISSION

The objective of applying importation is to provide a facility for importation of goods for specific purpose, for temporary use and at the time of importation, it is obvious that the goods will be exported.

Based on Indonesian Customs Law, there are two categories of temporary importation. The first one is temporary importation in which exemption of import duties is given, while the second is temporary importation in which the relief of import duties payment is given.

The first category consist of : 

    Goods for display/exhibition;
1. Goods to be used for seminars and the like; goods to be used for public entertainment purposes etc.

2. Goods to be used for public entertainment purposes

3. Goods to be used by experts, for research, educational, religious, and cultural purposes, and for making film/movies

4. Container used to transport goods repeatedly

5. Samples, models or molds

6. Articles to be used for games

7. Vehicles or means of transport used for tourists’ own purposes

8. Articles to be used for oil drilling operation

9. Articles to be repaired, reconditioned, modified, tested or maintained

10. Live animals for publics entertainment, training, breed or the like.

In the second category of temporary importation are :

-  imports of articles to be used in working projects not including the types of goods that the exemption is given, and 

-  imports of articles to be used for production purposes or domestic transportation.

The security with the amount of duties and taxes due has to be deposited for temporary import of which the exemption of import duties is given at the time of entry. For temporary importation, having relief of payment of import duties, they have to pay 2% of import duties and taxes each month for the period of its use.

Any person who does not re-export the temporarily admitted goods within a specified period permitted shall be subject to pay import duties and taxes on their importation and an additional administrative fine of 100% of import duties and taxes due.

OBTAINING REFUNDS/ DRAWBACKS ON YOUR DUTY PAYMENT

Drawback facility is only granted for the producer-exporters that use imported supporting materials needed for the production of export products. To access this facility prior to importation, the producer-exporters should file an application for exemption of import duties to the Board of Export Facilitation and Financial Data Processing of the Ministry of Finance (BAPEKSTA-KEUANGAN).

The application should be accompanied by a statement ensuring that there is a correlation between the imported supporting materials and the products for export. If the application is approved, then the producer-exporters should submit a bank security or surety bond and a five year record of detailed accounts and notes of exemptions of import duties.

The import duties of the bank guaranty which have already been paid or placed at the time of importation by the producer-exporters will be refunded or returned if they are able to prove that the product, in which imported supporting materials embodied, has already been exported.

LICENSES/ BONDED WAREHOUSES

Based on Indonesian Customs Law, a bonded storage means an area, a place, or a building, a place or an area that meets certain requirements used to store, to process, to display, and/or to provide for sale, goods for which the import duties are deffered in which under specified conditions may be designated :

1. to store goods that will be imported for home use or for re-export;

2. to store and/or process goods prior to export or to import of goods for home use;

3. to store or display goods; or

4. to store, provide for sale and sell imported goods to particular people.

The main purpose of the establishment of the Bonded Storage is to facilitate business community with an opportunity to defer payment of the import duties, while at the same time they can keep, store, exhibit, sell, pack, re-pack, and/or process goods originating from outside the Customs Territory without prior being charged with the import duty. It also aimed to ensure the expeditious flow of goods on exportation and importation as well as to increase of domestic production in the framework of promoting development and growth of national economy.

With the approval from the Customs Official, goods may be released from the Bonded Storage to be imported for home use, or to be further processed, or to be exported before or after processing, or to be transported to another Bonded Storage or Temporary Storage.

Released of goods for home use shall be subject to the Import Duty on the basis of the effective tariff at the time of importation for home use and on the basis of Customs value at the time the goods are brought into the Bonded Storage.

HIGHLIGHTS OF SPECIFIC FACILITES

Pre-Notification

Importers may submit Import Declaration (PIB) prior to the arrival of the means of transport enclosed with a copy of facsimile of AWB and/or House AWB (HAWB). B/L and/or House B/L (HB/L) of imported goods legalized by the carrier. The service of PIB may be performed according to the provision on clearance of imported goods.

Rush-Handling

Importers/customs brokers may release certain imported goods by using complementary customs documents along with the security to obtain rush-handling facility.

Clearance of imported goods using rush-handling facility may only be carried out for:

a. Organ of human body, i.e. kidney, eye(s), blood;

b. Corpses and ashes of corpses;

c. Goods which may damage the environment, i.e. goods containing radiation

d. Live animal;

e. Live plant;

f. Time-sensitive newspapers, magazines;

g. Documents handled by courier service;

h. Other goods, because of its nature, shall be cleared using rush-handling facility. The goods shall be approved by the Director-General of Customs and Excise.

Importers/customs brokers shall submit definitive PIB (Pemberitahuan Import Barang = Import Declaration), according to the procedures in order to get determination of green channel without issuing SPPB (Surat Pemberitahuan Pengeluaran Barang = Notification of Release of Goods), 7 (seven) working days at the latest since the date of clearance of the imported goods to enable them to withdraw the security. In case this obligation cannot be fulfilled, the security may be cleared and rush-handling facility for the importers/customs brokers shall be terminated.

Clearance of Imported Goods Using Deferred Payment Facility

Clearance of imported goods using deferred payment facility of import duty, excise and taxes may be carried out for the following goods:

a. Imported by importers using periodic payment facility;

b. Of urgent development project;

c. Of emergency prevention, i.e. natural disaster;

d. Which will be granted exemption of import duty and/or taxes before its decision has been issued

For the necessity of the clearance of imported goods, importers/customs brokers shall use PIB along with the security or complementary customs documents.

Importers/customs brokers shall submit definitive PIB, according to the procedures in order to get determination of green channel without issuing SPPB, on the due date of determination at the latest.

Unloading and Storage of Imported Goods in Places other than in Customs Area and Temporary Storage (TPS)

Unloading and storage of imported goods in places other than in Customs Area and TPS may be conducted after obtaining approval from Head of Customs Service Office.

Physical Inspection of Imported Goods in the Importer Premises

Physical inspection of imported goods in the importer premises may be performed provided that the importer has received approval to store the imported goods in such places.

Pre-inspection and Sampling for Making PIB

Pre-inspection and sampling for making PIB may be performed if the importer finds difficulties in determining classification and/or assessing customs value as a basis for assessment of import duty, excise and taxes. The difficulties may arise from the unclear explanation and/or details of customs value and/or quality of goods in the complementary customs documents.

In order to get approval for pre-inspection and sampling, the importers may file a written request to Head of Customs Service Office.

Periodic Payment

Head of Customs Service Office may grant periodic payment facility to the importers by way of deferring payment of import duty, excise and taxes of imported goods in a certain period of time. The importer shall deposit security to the Head of Customs Service Office. The facility will be terminated if within 7 (seven) working days the importer does not pay the import duty, excise and taxes.

Periodic PIB

Head of Customs Service Office may grant facility for clearance of imported goods using Periodic PIB of the goods which have been cleared ahead by using complementary customs document and security in a certain period of time. The facility may be granted to the importer who has received periodic payment facility.

The imported goods which may be cleared using Periodic PIB are:

a. Goods which its importation is in high frequency and needs to be consumed immediately;

b. Goods imported through pipes or transmission net; or

c. Goods which based on the consideration of the Director-General of Customs and Excise may be granted Periodic PIB facility.

The facility will be terminated if within 7 (seven) working days since the due date the importer does not pay the import duty, excise and taxes and does not submit the Periodic PIB.

OBJECTION, APPEAL AND APPEAL INSTITUTION

Any person who has objections to the assessment of tariff classification and/or Customs value determined by the Customs Official, may file a written objection letter only to the Director General of Customs and Excise (DG) in 30 days as of the date of the assessment by depositing a security to the amount of the Import duties due.

Within period of 60 days the DG has not come to any decision, the objection shall be deemed accepted and the security is in the form of cash and the returned security is conducted after the sixty days, the Government shall be grant 2% monthly interest for 24 months maximum.

Any person which is cubject to penalty, may file a written objection only to the DG in 30 days after getting a notification letter, by depositing a security to amount of the administrative fine.

Within period of 60 days after objection is received, the DG shall make a decision on the objection. Whenever the objection is rejected by the DG, the security shall be cashed and the import duty due shall be deemed paid. If the objection is accepted, such a security shall be returned.

If within the period of 60 days the DG has not come to any decision, the objection shall be deemed accepted and the security shall be returned. If the security is in the form of cash and the returned security is conducted after the sixty days, the Government shall be grant 2% monthly interest for 24 months maximum,

Any person who has objections to the assessment of tariff classification and/or Customs value determined by the Customs official or decided by DG may file a written appeal to the Customs and Excise Appeal Institution in 60 days as of the date of the assessment or decision, after the Import Duty has been paid. The decision made by such institution shall be final.

GOODS OF BORDER CROSSER

Border crosser are inhabitants who live in the border area of a state, and have an identity card issued by an authorised institution, crossing the border and passing through the border controller.

The description and the fixed value of goods carried out by border crosser which are exempted from Customs duties and import/taxes varies depend on the agreement between the related parties. For example:

- Indonesia and Malaysia:

not exceeding FOB Mal. R 600 per person for one month, through land border

not exceeding FOB Mal. R 600 per boat for one trip through sea border

- Indonesia and Philippines:

not exceeding FOB US$ 250 per person for one month

Indonesia and Papua New Guinea

not exceeding FOB US$ 300 per person for one month

ANTI DUMPING AND COUNTERVAILING DUTIES

An anti-dumping duty shall be applied to imported goods in case where the export price of the goods is lower than its normal value; and the importation of such goods cause material injury and threaten the domestic industry that produces similar goods: or may materially retard the establishment of a domestic industry of similar goods.

Anti dumping duty shall be imposed on the imported goods at the maximum amount of margin dumping (normal value minus export price) and shall be imposed as an addition to be import duty which is normally collected.

Countervailing duties shall be applied on imported goods in case when subsidy of proven to be borne on cash goods produced in the exporting country: and importation of such goods cause of material injury and threaten the domestic industry that produced similar goods; or materially retard the establishment of domestic industry of similar goods.

Countervailing duty shall be applied on the imported goods at the maximum amount of subsidy netto (the subsidy minus application fee and other expenses incurred to obtain the subsidy): and/or charge levied on exported good to offset the subsidy. This duty shall be imposed as an addition to the import duty which is normally collected.


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