Government Exempts Duty of Imported Machines/Goods/Materials for Industrial Development

Government Exempts Duty of Imported Machines/Goods/Materials for Industrial Development

In order to give business development legibility for investment, as well as to give legal certainty  to the business doers, the Government through the Ministry of Finance exempted duty of imported machines, goods, and materials for industrial construction and development for the investment.

The provision of the exemption is stated in Finance Minister Regulation (PMK) No. 188/PMK.010/2015 on the Second Amendment to Finance Minister Regulation (PMK) No. 176/PMK.011/2009 on Duty Exemption of Imported Machines, Goods and Materials for Industrial Construction and Development for the Investment. The new PMK is signed by the Minister of Finance Bambang P.S. Brodjonegoro on 30 September 2015.

According to the PMK, the exemption of duty could be granted to machines, goods and materials which come from Free Port and Trade Areas, Special Economic Zones (KEK) and Bonded Storage Area.

“Duty exemption of imported machines for industrial construction as intended by Article 2 paragraph (1) shall be given for the period of 2 (two) years since the provision takes effect,” Article 3 paragraph (1) of the PMK says.

Import time/period could be extended in accordance to construction time of the industry as mentioned in the investment agreement letter.

Meanwhile, the company which has finished the industrial construction and is ready to produce, unless for services industry, could be granted duty exemption of imported goods and materials for a maximum period of 2 (two) years in accordance with the installed capacity with the importing period of 2 years since the issuance of the regulation.

The company which has received duty exemption facilities, yet have not realized all importation of goods and materials for 2 (two) years, according to the PMK,  could be given 1 (one) extra year for the importation since the expiration date of import duty exemption facilities.

The PMK also stressed that duty exemption of imported machines for industrial development shall apply for the period of 2 (two) years since the Regulation takes effect.

Meanwhile, the company which has finished the industrial development, unless for services industry, could be granted with duty exemption of imported goods and materials for additional production necessity for the maximum of 2 (two) years after the provision takes effect, as long as they add the capasity at least 30% from installed capacity.

Article 5B of the PMK stated that the company which conducts construction by using imported production machines bought in Indonesia, unless for services industry, could be granted with duty exemption of imported goods and materials for production needs for a period of 2 (two) years according to the installed capacity, and importation period of 2 (two) years since the Regulation takes effect.

The company conducting development by using imported production machines bought in Indonesia, unless for services industry, could be granted duty exemption of imported goods and materials for additional production needs for a period of 2 (two) years according to the installed capacity, and importation period of 2 (two) years since the Regulation takes effect, as long as they add the capacity at least 30 percent from installed capacity.

“The Minister Regulation should take effect since the enactment date,” Article 2 of the PMK says.

(Human Kemenkeu/ES) (RAS/LW-Naster/Sy)