COVID-19 Pandemic: Guidelines for the Imposition of Government-Borne Import Duty to Certain Industries
On 8 October 2020, the Minister of Industrial Affairs of the Republic of Indonesia issued a new regulation which provides a guideline for the utilization of import-duty facilities borne by the government/Bea Masuk Ditanggung Pemerintah (“BMDTP Facility”). This new regulation is intended to support the implementation of the BMDTP Facility as provided by the Minister of Finance (“MoF”).
Legal Frameworks: Our below executive summary refers to the following prevailing laws and regulation:
- MoF Regulation No. 134/PMK.010/2020 on Government-Borne Import Duty for Imports of Goods and Materials Which Are Used to Produce Goods and/or Services by Certain Industrial Sectors Impacted by the Corona Virus Disease 2019 Pandemic (COVID-19) (“MoF Regulation 134/2020”)
- Minister of Industry Regulation No. 31 of 2020 on Implementing Guidelines for the Utilization of Government-Borne Import Duty Facilities for Imports of Goods and/or Services by Certain Industrial Sectors Affected by the Corona Virus Disease 2019 (Covid-19) Pandemic (“MoI Regulation 31/2020”)
Main Keys on the Guidelines for the Imposition of BMDTP Facility: We have managed to provide you the following main keys regarding guidelines for the imposition of the BMDTP Facility.
Scope of the Goods and Materials: We note that BMDTP Facility will be granted to various goods and materials that fulfill the following requirements:
- Goods and materials have yet to be produced domestically;
- Goods and materials are produced domestically but have yet fulfilled the required specifications; or
- Goods and materials are produced domestically but in limited amounts that are not sufficient for the relevant industrial requirements according to recommendations made by the relevant ministries or agencies (Art. 2 (2) of MoI Regulation 31/2020).
In addition to the above, the imported goods and materials must not subject to (i) 0% import duty, (ii) imposed by 0% import duty based on international contracts, (iii) anti-dumping import duty or temporary anti-dumping import duty, safety-measure import duty or temporary safety-measure import duty, return import duty or retaliatory-measure import duty; or (iv) destined for storage in bonded-storage areas (Art. 2 (3) of MoI Regulation 31/2020).
Application to Obtain BMDTP Facility: On the eligibility, to obtain a BMDPT Facility, a company must apply for the issuance of BMDPT Facility recommendation to the Director of Industrial Development (“Director”) (Art. 6 (1) of MoI Regulation 31/2020).
We note that the list of documents that shall be submitted comprises of: (i) a list of goods and materials for which BM-DTP, and (ii) an Industrial Verification Certificate/Surat Keterangan Verifikasi Industri (“SKVI”) (Art. 6 (2) of MoI Regulation 31/2020).
Please kindly note that the industrial company shall submit a certain required document for SKVI issuance to the Verification Management Agency/Lembaga Pelaksana Verifikasi (“LPV”) through the National Industrial Information System/Sistem Informasi Industri Nasional (“SIINas”) (Art. 10 and 11 of MoI Regulation 31/2020). Lastly, the LPV then will issue the SKVI upon the completion of the initial and final verification process (Art. 12 (2) of MoI Regulation 31/2020).
Utilization of BMDTP Facility: We note that all imported goods and materials that utilize BMDTP Facility are subjected to: (i) be used to produce goods and/or services for domestic consumption; (ii) be utilized in accordance with their stated purposes; and (iii) must not be handed over to any other parties (Art. 21 (1) of MoF Regulation 134/2020).