NOTIFICATION UNDER ARTICLE 22 OF THE AGREEMENT ON

IMPLEMENTATION OF ARTICLE vii OF THE General

AGREEMENT ON TARIFFS AND TRADE 1994

Indonesia

The following submission, dated 2 May 2025, is being circulated at the request of the delegation of Indonesia.

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Pursuant to Article 22.2 of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, Indonesia is pleased to notify the changes of its national legislation on customs valuation[1]:

-_      Customs Law No. 17 of 2006 on the Amendment of Customs Law No. 10 of 1995.

The above-mentioned document is authentic in the Indonesian, and please find attached the English version of Customs Law No. 17/2006, Articles 15 to 17 (non-official translation).

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UNOFFICIAL TRANSLATION

CUSTOMS LAW NUMBER 17 OF 2006 ON THE AMENDMENT OF

CUSTOMS LAW NUMBER 10 OF 1995

Part Two

Customs Value

Article 15

(1)_      The customs value for the calculation of import duty shall be the transaction value.

(2)_      If the customs value for the calculation of import duty cannot be determined under the provision of paragraph (1), the customs value shall be the transaction value of identical goods.

(3)_      If the customs value for the calculation of import duty cannot be determined under the provisions of paragraph (1) and paragraph (2), the customs value shall be the transaction value of similar goods.

(3a)  If the customs value for the calculation of import duty cannot be determined under the provisions of paragraph (1), paragraph (2), and paragraph (3), the customs value shall be based on the provisions of paragraph (4) and paragraph (5) in sequential order, unless as requested by the importer, the provisions of paragraph may precede provision of paragraph (4).

(4)_      If the customs value for the calculation of import duty cannot be determined under the provisions of paragraph (1), paragraph (2), and paragraph (3), the customs value of the imported goods shall be based on deductive method.

(5)_      If the customs value for the calculation of import duty cannot be determined under the provisions of paragraph (1), paragraph (2), paragraph (3), and deductive method as referred to in paragraph (4), the customs value of the imported goods shall be based on computed method.

(6)_      If the customs value for the calculation of import duty cannot be determined under the provisions of paragraph (1), paragraph (2), paragraph (3), deductive method as referred to in paragraph (4), or computed method as referred to in paragraph (5), the customs value shall be determined by using reasonable procedure consistent with the principles and the provisions as referred to in paragraph (1), paragraph (2), paragraph (3), paragraph (4), or paragraph (5) on the basis of data available in the customs territory subject to certain limitations.

(7)_      The provisions on customs value for the calculation of import duty shall be regulated further with or based on Minister regulation.

Explanation of Article 15

Paragraph (1)

"Transaction value" means the price actually paid or payable by the buyer to seller for the goods when sold for export to the customs territory, added with:

a._    the costs incurred by the buyer but are not included in the price actually paid or payable:

1._    commission and brokerage, except buying commission;

2._    the cost of containers which are treated as being one for customs purpose with the goods in question;

3._    the cost of packing whether for labor or materials;

b._    the value of goods and services in the form of:

1._    material, component, part and similar items incorporated in the import goods;

2._    tools, dies, molds and similar items used in the production of the imported goods;

3._    materials consumed in the production of the imported goods;

4._    engineering, development, artwork, design work, plans and sketches undertaken elsewhere than in the customs territory and necessary for the production of the imported goods, supplied directly or indirectly by the buyer, on the condition that goods and services:

a)_    are free of charge or at reduced cost;

b)_    are for use in connection with the production and sale for export of the imported goods;

c)_    have not been included in the price actually paid or payable

c._     royalties and license fees related to the goods valued that the buyer must pay either directly or indirectly as a condition of sale of the goods being valued, to the extent that such royalties and license fees are not included in the price actually paid or payable price of the imported goods in question

d._    the value of any part of proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller.

e._    the cost of transport of the imported goods to the port or place of importation.

f._     loading, unloading and handling charges associated with the transport of the imported goods to the port or place of importation.

g._    the cost of insurance.

Paragraph (2)

"Identical goods" means goods which are the same in all respects, including physical characteristic, quality and reputation, and:

a._    produced by the same producer in the same country; or

b._    produced by different producer in the same country.

Paragraph (3)

“Similar goods” means goods which are alike in the physical character and component materials which enable them to perform the same functions and are commercially interchangeable, and:

a._    produced by the same producer in the same country; or

b._    produced by different producer in the same country.

Paragraph (3a)

Self-explanatory.

Paragraph (4)

“Deduction method” means, a method to calculate customs value of imported goods based on selling price of imported goods, identical imported goods or similar imported goods, in the market of the customs territory minus costs or expenses, including commissions or profit, transportation, insurance, import duty and taxes.

Paragraph (5)

"Computed method" means a method to calculate customs value of imported goods based on the sum of the cost or value of material and fabrication or processing, and other cost/expenses occurred until the goods arrive at the port or place of importation at the customs territory.

Paragraph (6)

“Certain limitations” means that customs value shall not be determined on the basis of:

a._    the selling price of domestically produced goods

b._    a system which provides for the acceptance for customs purposes of the higher of two alternative values;

c._     the price of goods in the domestic market of the country of exportation;

d._    the cost of production other than computed values which have been determined for identical or similar goods in accordance with the provisions of paragraph (5);

e._    the price of goods for export to a country other than customs territory;

f._     minimum customs values; or

g._    arbitrary or fictitious values.

Paragraph (7)

Self-explanatory.

Part Three

Determination of Tariff and Customs Value

Article 16

(1)_  The customs officer may determine the tariff on imported goods prior to the submission of the customs declaration or within thirty days as of the date of the customs declaration.

(2)_  The customs officer may determine the customs value for calculation of import duty on imported goods within thirty days as of the date of the customs declaration.

(3)_  If the determination as referred to in paragraph (1) and/or paragraph (2) causes an underpayment of the import duty, unless the importer files the objection as referred to in Article 93 paragraph (1), the importer shall pay in full the underpayment of import duty pursuant to the determination.

(4)_  The importer who has incorrectly declared the customs value for the calculation of the import duty, hence the underpayment of the import duty occurs, shall be subject to an administrative fine at minimum of 100% (one hundred percent) up to maximum of 1000% (one thousand percent) of the underpayment of import duty.

(5)_  If the determination as referred to in paragraph (1) and/or paragraph (2) causes an excess payment of the import duty, refund of the import duty paid shall be in an amount equal to the excess payment.

(6)_  Provisions on determination of tariff and customs value shall be regulated further with or based on Minister regulation.

Explanation of Article 16

Determination of tariff and customs value on the submitted self-assessed customs declaration is performed only where the declared tariff and customs value are different from the actual tariff and/or customs value, so that implies on:

a._    the underpayment of import duty where the tariff and/or customs value is determined higher;

b._    the excess payment of import duty where the tariff and/or customs value is determined lower.

In certain cases, tariff and customs value for the calculation of import duty are determined after physical examination, prior to the submission of customs declaration.

To provide certainty of service to the public, where the customs declaration is registered, a determination shall be given within 30 (thirty) days since the date of registration. 30 (thirty) days period is deemed sufficient for the customs officer to gather all information necessary to make a determination.

Paragraph (1)

The term “Tariff determination prior to the submission of the customs declaration” means the determination of tariff on a certain importation in an official assessment manner.

Paragraph (2)

The term “Customs value determination prior to the submission of the customs declaration” means the determination of customs value on a certain importation such as for temporary admission, passenger goods, or consignment goods in an official assessment manner.

Paragraph (3)

Self-explanatory.

Paragraph (4)

Self-explanatory.

Paragraph (5)

Self-explanatory.

Paragraph (6)

Self-explanatory.

Article 17

(1)_  The Director General may redetermine the tariff and the customs value for the calculation of the import duty within a period of two years as of the date of the customs declaration.

(2)_  If the determination as referred to in paragraph (1) differs from the determination as referred to in Article 16, the Director General notifies it in writing to the importer to:

a._    pay the underpayment of the import duty, or

b._    drawback of the excess of import duty.

(3)_  The underpayment of the import duty or the drawback of the import duty as referred to in paragraph (2) shall be paid pursuant to the redetermination.

(4)_  Redetermination as referred to in paragraph (2), if it is due to erroneous declaration of transaction value that causes the underpayment of the import duty, shall be subject to an administrative fine at the minimum of 100% (one hundred percent) up to the maximum of 1000% (one thousand percent) of the underpayment of import duty.

Explanation of Article 17

Paragraph (1)

Principally the determination made by the customs officer is binding and applicable. However, if in the re-examination of customs declaration or in the implementation of customs audit detects any underpayment and/or excess payment of the import duty caused by incorrect declaration of the tariff and/or customs value, the Director General may redetermine the tariff and customs value.

Paragraph (2)

Self-explanatory.

Paragraph (3)

Self-explanatory.

Paragraph (4)

This provision indicates that basically, only the seller and the buyer know the amount of transaction value, so the validity of the declaration of transaction value is based on the honesty of the parties. Therefore, erroneous caused by dishonesty of the parties that is disclosed in the re-examination of the customs declaration or in the implementation of customs audit, shall be subject to an administrative fine.

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