1. Import duty, the rate varies according to the kind of goods imported with a range from 0 to  170%.

2. Value added tax (VAT) with a rate varies from 0 to 10%,

3. Sales Tax on Luxurious Goods (STLG) are either 10%, 20%, 35%, 40% or 50% depending on the kind of goods

4. Income Tax (PPh) is 2.5% for a registered importer and 7.5% for an unregistered importer.

Assesment of import duties and taxes are based on Cost Insurance Freight (CIF) method.

Payment of import duties and taxes mentioned above, shall be done through a foreign exchange bank or via a Customs Service Office during office hours before Customs or import Declaration is submitted. At Tanjung Priok Seaport and Soekarno-Hatta Airport where EDI (Electronic Data Interchange) system is fully implemented, payment of import duties and taxes shall be paid through electronic transfer.

For goods classification purposes, since January 1, 1989 Indonesian Customs has implemented a Tariff Schedule which is based on the Harmonized Commodity Description and Coding System (HS). Under the latest revision (HS 1996 version), Indoneisan Tariff Schedule consists of rules of interpretation, 21 sections, 97 chapters, 5,113 subheadings (6-digits code) and 7,214 national tariff lines (9-digits code).

Indonesian Customs & Excise acceded to the HS Convention on May 28, 1993.

Based on the Indonesian Customs Law, the Customs value shall be determined as follows:

1. The Customs value of imported goods shall be the transaction value, that is the price actually paid or payable for the good when sold or export to the country of importation adjusted in accordance with the provision of article 8 agreement on Implementation of article VII of the General Agreement on Tariffs and Trade 1994.

2. If the Customs value of the imported goods cannot be determined under the transaction value method, then the Customs value shall be the transaction value of identical goods.

3. If the Customs value of the imported goods cannot be determined under all mentioned above methods, then the Customs value shall be the transaction value of similar goods.

4. If the Customs value of the imported goods cannot be determined under all mentioned above methods, then the Customs value shall be based on a deductive method

5. If the Customs value of the imported goods cannot be determined under all mentioned above methods, then the Customs value shall be based on a computed method

6. If the Customs value of the imported goods cannot be determined under all mentioned above methods, then the Customs value shall be determined by using reasonable means consistent with the principles and the provisions mentioned under point 1 to 5 above on the basis of available data in the Customs Territory subject to certain limitations.

UNIMPOSITION, EXEMPTIONS, RELIEF AND REFUND OF THE IMPORT DUTY

Import Duties shall not be imposed on goods brought into the Customs Territory for transit or transhipment. In principle, goods from outside Customs Territory are subject to the Import Duties at the time such good are brought into Customs Territory. Considering that these goods are not intended to be imported for home use, the Import Duties are not imposed.

Exemptions of the Import Duty shall be granted for import of:

• goods of foreign countries representatives and their officials who work in Indonesia under reciprocal principles

• goods for international bodies and their officials who work in Indonesia

• goods and materials to be processed, assembled, or installed on other goods destined for export

• scientific books

• goods donated for public worship, charity, social, and cultural purposes

• goods for museum, zoo, and other similar public places

• goods for research and scientific purposes

• goods for the blinds and other disables

• weapons, ammunition, and other military equipment, including spare parts for the national defense and security

• goods and materials used to produce other goods for the national defense and security

• samples of no commercial value

• coffins or other containers containing corpses or ashes of corpses

• removal goods

• goods brought by passengers, crews of means of transport, border crossers, and consignments of a certain Customs value and/or a certain number

Exemption or relief of the Import Duty may also be granted for import of:

1. machinery for the establishment and development of industry

2. goods and materials for the establishment and development of industry for a specified period of time

3. equipment and substances used to prevent environmental pollution

4. seeds and breeding animals for the establishment and development of agricultural industry, animal husbandry, or fishery

5. marine products caught by licensed hauling vessels

6. goods exported to undergo repair, processing, or testing

7. goods re-imported in the same state

8. goods which are naturally damaged, decreased in quality, destroyed or decreased in volume or weight occurred between the time of transportation on the Customs Territory and the time of import approved for home use

9. human therapeutic substances, blood grouping and tissue typing reagents

10. goods by the Government for public purposes

11. goods for temporary admission

The provisions on exemptions, relief and refund shall be further regulated by the Minister of Finance. It should be noted that any person who does not comply with the provisions of the exemption and/or relief of the Import Duties by virtue of Indonesian Customs Law, whenever causing loss of the government revenue, shall be subject to an administrative fine of one hundred percent.

Refund of the Import Duty may be carried out in a whole or in a part of the duty paid for, interalia:

1. excess payment of the Import Duties, for example an excess payment resulted from Customs determination of tariff classification, or an excess payment caused by an administrative error

2. excess payment of the Import Duty as a result of the decision of the appeal institution

1. carry out the import declaration and pay import duty and taxes at the bank or customs office

2. submit import declaration, the security and other supporting documents to Customs.

3. submit complementary customs documents and security

Declaration must be made on an import declaration forms called "Declaration of Importation of Goods" ( PIB ) in which several important information submitted by declarant, such as name & address of exporter; name, address & status of importer; name & address of declarant; name of the vessel; description of goods; value of the goods; etc.

In four main ports (Tanjung Priok I, II, III and Soekarno-Hatta I-II), the declaration should be submitted and processed electronically through the EDI (Electronic Data Interchange) system, while in the other ports it may be done manually or in diskettes media.

By the maximum of 4 (four) hours, importers shall get decision from customs of the PIB which has been submitted, whether the PIB is rejected or received and determining the clearance channel. Customs should give the argument of rejection in the Rejection Note.

Physical inspection or examination will be conducted by Customs at the port of destination in Indonesia, and as mentioned above, will only be performed based on a very selective basis (through determination of red or green channels). With regard to physical inspection, it shall be carried out in the following cases:

• there are intelligence information determined by computer

• temporary admission goods

• re-imported goods

To facilitate physical inspection, Customs Service office at Tanjung Priok Jakarta and Tanjung Perak Surabaya use the Hi Co Scan X-Ray Container. Customs officials can decide if physical inspection is needed or not by translating the Scanner image of that such apparatus.

Imported goods may only be released from the Customs area after the Customs formalities have been fulfilled and the approval from the Customs official has been obtained.

In case of a tariff misclassification or miscalculation on import declaration occurred, the goods can still be released though the shortage of import duties and taxes due on such importation as a result of such mistakes is not paid yet. This is on the condition that such a shortage has to be paid within 30 (thirty) days from the date of the letter of payment shortage declaration of import duties from the date of Reassessment Note issued on such an import declaration.

Cases arising from condition 4 above are inspected by a government appointed surveyor.

Customs examination shall be performed at the Customs area, at the exporter’s premises or other location used to store export goods. Surveyor examination shall be performed at any place beyond customs area which is determined by exporter.

The objective of applying importation is to provide a facility for importation of goods for specific purpose, for temporary use and at the time of importation, it is obvious that the goods will be exported.

Based on Indonesian Customs Law, there are two categories of temporary importation. The first one is temporary importation in which exemption of import duties is given, while the second is temporary importation in which the relief of import duties payment is given.

The first category consist of :

Goods for display/exhibition;
1. Goods to be used for seminars and the like; goods to be used for public entertainment purposes etc.

2. Goods to be used for public entertainment purposes

3. Goods to be used by experts, for research, educational, religious, and cultural purposes, and for making film/movies

4. Container used to transport goods repeatedly

5. Samples, models or molds

6. Articles to be used for games

7. Vehicles or means of transport used for tourists’ own purposes

8. Articles to be used for oil drilling operation

9. Articles to be repaired, reconditioned, modified, tested or maintained

10. Live animals for publics entertainment, training, breed or the like.

• imports of articles to be used in working projects not including the types of goods that the exemption is given, and
  
• imports of articles to be used for production purposes or domestic transportation.

The security with the amount of duties and taxes due has to be deposited for temporary import of which the exemption of import duties is given at the time of entry. For temporary importation, having relief of payment of import duties, they have to pay 2% of import duties and taxes each month for the period of its use.

Any person who does not re-export the temporarily admitted goods within a specified period permitted shall be subject to pay import duties and taxes on their importation and an additional administrative fine of 100% of import duties and taxes due.

The main purpose of the establishment of the Bonded Storage is to facilitate business community with an opportunity to defer payment of the import duties, while at the same time they can keep, store, exhibit, sell, pack, re-pack, and/or process goods originating from outside the Customs Territory without prior being charged with the import duty. It also aimed to ensure the expeditious flow of goods on exportation and importation as well as to increase of domestic production in the framework of promoting development and growth of national economy.

With the approval from the Customs Official, goods may be released from the Bonded Storage to be imported for home use, or to be further processed, or to be exported before or after processing, or to be transported to another Bonded Storage or Temporary Storage.

Released of goods for home use shall be subject to the Import Duty on the basis of the effective tariff at the time of importation for home use and on the basis of Customs value at the time the goods are brought into the Bonded Storage.

Passenger’s goods can be categorized into :

1. Passenger’s goods which are exempted from customs duties and other import duties/taxes consist of :

   Personal effects normally needed during their trip or purchased abroad such as clothes, shoes, wrist-watch or

   • bags at a value not exceeding FOB US$ 250.00 per passenger or a maximum FOB US $ 1.000,00 per family and US $ 50.00 per air/ship crew member.

   • Cigarettes not exceeding 200 rolls or 50 rolls of cigars or 100 grams of sliced tobacco, and alcoholic beverages not exceeding one litre per adult person.

   • Cameras, video cameras, radios or portable radio tape recorders, binoculars and sport equipment in reasonable amounts needed by foreign tourists during their stay in Indonesia.

   Passengers which are carrying the above mentioned items may clear Customs through the "green channel".

   In this channel, there will be no Customs inspection, but Customs may also select passengers from this channel for examination.

2. Passenger’s goods which are subject to customs duties and other import duties/taxes.

   Goods shall be subject to Custom Duties and other import duties/taxes if its value exceeds the amount as specified in point no. 1 above. Passengers of this category shall follow the "red channel" for Customs clearance purposes.

In order to maintain the stability of Rupiah bank notes and supervising the circulation of money, bringing out or into the territory of Republic of Indonesia is drew up as follows:

• Bringing a total of not more than Rp 5,000,000 in free

• Bringing more than Rp 5,000,000 should carry out the Rupiah bank note Declaration stated by Bank Indonesia

• Bringing more than Rp 10,000,000 should have the letter of permission from Bank Indonesia

Without the prior approval of the authorized institutions, the following items are prohibited for importation into Indonesian Territory : narcotics, fire-arms/air-guns/spring guns, ammunition, light-signal pistols, explosive materials, transceivers, cordless telephones, colour photocopy machines, pornographic goods/publications, printed matters using Chinese characters and Chinese medicines etc. Its also should be noted that audio or video materials recorded in any media should be censored by the appropriate authorities prior to being imported.