The Minister of Finance (MoF) just issued new regulations concerning customs and excise, i.e., MoF Regulation No. 96 of 2023 (PMK 96). This regulation was promulgated on 18 September 2023 and would come into force on 18 November 2023 (sixty days after the promulgation date). A staff of the directorate general of customs and excise informs that the PMK 96 is issued to align with the current import trend and to protect the domestic industry. There are two interesting things regulated on PMK 96 which will be further elaborated in this publication, i.e., (A) regulations concerning PPMSE and (B) new additions to Most Favoured Nation (MFN) rules.
A. Regulations Concerning PPMSE
Align with the current trend of online shopping, the MoF now includes goods that are traded through PPMSE as part of the goods that are regulated under PMK 96 and therefore can be imposed with customs and excise as well. PPMSE is a trading organizer through electronic systems. The regulation defines PPMSE as business actors who provide electronic communication facilities for trading, i.e., (i) retail online or (ii) marketplace.
In addition, PMK 96 also obligates PPMSE which carries out import transactions of more than 1,000 deliveries in one calendar year to enter a partnership with the directorate general of customs and excise. The head of the customs office will send a notice to the eligible PPMSE. If the PPMSE fails to carry out the partnership within 10 days after the issuance of the notice, the customs office will not cater for the import of the goods from the PPMSE. Notwithstanding this, PMK 96 requires PPMSE which has reached the 1,000 parameters before the issuance of PMK 96 to carry out the partnership by 18 March 2024 at the latest.
The partnership can be in the form of (i) an exchange of an electronic cataloge and electronic invoice of the goods transacted through the PPMSE, or (ii) other forms of partnerships.
B. New Addition to MFN Rules
In general, PMK applies a 7.5% custom tariff for imported goods for consumption with a customs value of more than USD 3 – USD 1,500 per recipient per delivery. However, this rate would not be applicable for:
- cosmetics (under posts 33.03, 33.04, 33.05, 33.06, and 33.07),
- bags, suitcases (under posts 42.02)
- books and other goods (under posts 49.01, 49.02, 49.03, and 49.04),
- textiles, garments (under sections 61, 62 and 63),
- footwear, shoes (under section 64),
- goods from iron or steel (under section 73),
- bicycles, scooters (under HS code 8711.60.92, 8711.60.93, 8711.60.94, 8711.60.95, and 8711.60.99),
- non-motorized bicycles (under post 87.12), and
- watches (under posts 91.01 and 91.02).
The customs office would apply Most Favoured Nation (MFN) tariffs for the items as stipulated above – the MFN tariffs are higher than the general custom tariff of 7.5%.
Before the issuance of PMK 96, the MoF regulated the most favoured nation tariffs for certain goods as regulated under MoF Regulation No. 199/PMK.010/2019 (PMK 199). However, there were only four goods categories that were included in PMK 199. PMK 96 adds four more goods categories, i.e., cosmetics, bicycles, watches and goods from iron/steel. The customs official informs that the reasoning behind this addition is because of the high import traffic of such products, especially cosmetics products. Thus, the MoF believes that these goods must be included in the MFN lists to protect the domestic industry.
By the effective date of PMK 96, the regulation concerning customs and excise that was regulated under MoF Regulation No. 199/PMK.010/2019 will be revoked.
Conclusion
The government (through the MoF and the directorate general of customs and excise) is quick to react and adapt to the development of online shopping in this digital era. By (a) the inclusion of goods that are sold through PPMSE as the goods that are regulated under PMK 96, (b) the imposition of obligation for PPMSE which has reached certain thresholds to carry out partnership with the directorate general of customs and excise, and (c) the addition of list of goods that will be imposed with MFN tariff, hopefully the government can control the import activities in Indonesia to support the sustainability of the domestic industry.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
