Indonesia – The New Regime Of Customs Valuation Advice.

11 December, 2018

 

Overview

 

Previously, Indonesia’s customs authority ("Customs") helped importers with customs valuations by providing customs advice and valuation rulings.1 Importers that needed definite advice or certainty about the customs value of its imported goods could submit a request to Customs to obtain customs advice and valuation ruling.

 

In practice, these services seemed to be suspended or were no longer provided to importers due to certain internal policies, even though the provision on procedures to grant customs advice and valuation ruling has not been revoked. Thus, importers have only approached Customs for consultations if they are uncertain about customs valuation of their imported goods.

 

It seems that importers can now again enjoy those services from Customs under the new regime — as we will elaborate further below.

 

New Provision on Valuation Advice

 

The Ministry of Finance (MOF) has recently issued Regulation No. 134/PMK.04/2018 on Valuation Advice2 ("Regulation 134"), which came into effect on 2 November 2018.

 

Regulation 134 aims to accelerate the process of customs clearance from the customs zone, and to speed up the review process of imported goods' customs value, in accordance with the World Trade Organization Trade Facilitation Agreement and World Customs Organization Technical Guidelines on Advance Rulings for Classification, Origin, and Valuation.

 

This regulation will be a breath of fresh air to importers, who will have more certainty about the customs valuation of their imported goods prior to the submission of their customs declaration or Pemberitahuan Impor Barang (PIB). 

 

The Key Changes 

 

Please click on the table to enlarge.

 

Application Procedure

 

We set out below the steps to obtain valuation advice:10

 

Application

 

This can be submitted electronically through the Customs' system or manually with a written application letter in accordance with the format set out in Attachment A of Regulation 134.

 

Application documents should be submitted by attaching documents that prove a buy and sell transaction (e.g., purchase order, invoice), documents related to material substance of the customs value (e.g., contract, freight documents, insurance).

 

Review Process

 

If necessary, Customs may request additional data or documents from the importer through the system or through a written letter within 10 days after all of the application documents have been received.

 

The importer should provide any additional data or documents within five days after it receives the request letter.

Customs may request that the importer provide a verbal explanation regarding material substance in case the data or documents are deemed insufficient. The importer should meet and provide a verbal explanation within three days after the request letter has been received.

 

Rejection/Approval

 

Customs will decide whether to approve or reject the application within 30 to 40 days after the application documents have been completely received.

 

Impact on Importers

 

Valuation Advice is a form of customs valuation ruling in Indonesia. This helps importers obtain certainty when declaring the customs value of goods that they will import.

 

Once issued, Valuation Advice is binding. Therefore, Customs should follow the valuation guidance stated in the advice. This advice is valid for three years and is useful, especially during a customs audit.

 

The Valuation Advice can mitigate the risks of incurring penalties due to mistakes in declaration of customs value. An importer that has mistakenly declared customs value that causes an underpayment of import duty will be imposed with a penalty in the range of the underpayment of import duty multiplied by 100 to 1,000. 

 

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