Government Exempts VAT of Planes, Ships, Crossing Vessels and Trains Import

Government Exempts VAT of Planes, Ships, Crossing Vessels and Trains Import

In order to implement the provision of Article 18B paragraph (1) of the Law of the Republic of Indonesia Number 8 of 1983, that ammended with Law Number 42 of 2009, President Joko Widodo signed a Government Regulation Number 69 of 2015 on Exemption of Value Added Tax (VAT) on Import and Delivery of Specific Means of Transportation and Taxable Services Related to Certain Means of Transportation on 16 September 2015.

Article 1 on the Government Regulation says; certain means of transportation which import is exempted of VAT, are:

a. water, under water, air  transports, and trains, as well as its spare parts which are imported by Ministry of Defence, Indonesian National Defence Forces, Indonesian National Police, and other parties which appointed by Ministry of Defence, Indonesian National Defence Forces and Indonesian National Police to conduct the import.

b. sea, river, lake and crossing vessels, fishing vessel, pilotage vessel, tugboat, barge, and spare parts, as well as sailing safety equipment and people safety equipment which are imported and used by National Commercial Shipping Company, National Fishing Company, National Port Services Company and River, Lake and Crossing Transport Services Companies, based on their own business activities.

c. planes and its spare parts, as well as flight safety equipment and people safety equipment, repairing and maintenance tools which are imported and used by National Commercial Flight Company, and other parties which appointed by National Commercial Flight Company in order to give maintenance and repair services of the planes to National Commercial Flight Company; and

d. trains and its spare parts, as well as repair and maintenance tools, and train infrastructures which are imported and used by General Railway Facilities Enterprises and/or General Railway Infrastructures Enterprises and component or material which are imported by other parties which appointed by General Railway Facilities Enterprises and/or General Railway Infrastructures Enterprises, which are used to build train, spare parts, repair and maintenance tools, as well as train infrastructures to be used by General Railway Facilities Enterprises and/or General Railway Infrastructures Enterprises.

Besides exempted of VAT on import, the four means of transportations exempted of VAT on the delivery.

Several Taxable Services which are related to certain means of transportations that are exempted of VAT on the delivery are including:

a. services received by National Commercial Shipping Company, National Fishing Company, National Port Service Company River, Lake and Crossing Transport Service Companies including: 1. ship rental services; 2. port services including tow, pilot, tether and dock services; and docking ship maintenance and repair services.

b. services received by National Commercial Flight Company including:1. plane rental services; and 2. plane maintenance and repair services; and

c. train maintenance and repair services received by General Railway Facilities Enterprises.

The Government Regulation Number 69 of 2015 also mentioned input tax that is paid for the Taxable Goods and/or Taxable Services which the delivery are exempted of VAT could be paid by credit.

“Input tax that could be paid by credit as intended by paragraph (1) is input tax on the Taxable Goods and/or Taxable Services after the enactment of this Government Regulation,” Article 4 paragraph (2) says.

Regarding certain means of transportation which on the import and/or delivery has received facilites that are exempted of VAT as intended, shall be obligated to pay the VAT when: a. 4 (four) years after the import and/or delivery, the transportation is not used as its initial purpose; or b. handed over to other party, partially or entirely. Based on this Government Regulation, the VAT that is not levied on import and/or certain means of transportation must be paid.

The Implementation of  provision in the Government Regulation shall be evaluated for a period not exceeding 3 (three) years after the Government Regulation takes effect, and conducted by monitoring and evaluating team formed by the Minister of Finance Regulation,”  Article 7 paragraph (1,2) of the Government Regulation says.

Article 10 of the Government Regulation says the Government Regulation shall take effect 30 (thirty) days after the Law is enacted, which is on 17 September 2015 by Law and Human Rights Minister Yasonna H. Laoly.   (Pusdatin/ES) (RAS/MMD/YM–Naster/Sy)