ProdukHukum Perdagangan

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DECREE OF THE MINISTER OF FINANCE NO. 449/KMK.04/2002 DATED OCTOBER 24, 2002

ON

STIPULATION OF TARIFFS OF EXCISE ON AND FLOOR PRICES OF TOBACCO PRODUCTS

THE MINISTER OF FINANCE OF THE REPUBLIC OF INDONESIA,

Considering :

That in the framework of implementing the provisions in Article 5 and Article 6 of Law No. 11/1995 on excise, it is necessary to stipulate a decree of the Minister of Finance on stipulation of tariffs of excise on and floor prices of tobacco products.

In view of :

1. Law No. 10/1995 on customs affairs (Statute Book of 1995 No. 75, Supplement to Statute Book No. 3612); 2. Law No. 11/1995 on excise affairs (Statute Book of 1995 No. 76, Supplement to Statute Book No. 3613); 3. Presidential Decree No. 228/M/2001;

4. Decree of the Minister of Finance No. 552/KMK.04/2000 on definition of small- scale businesses in value added tax;

5. Decree of the Minister of Finance No. 62/KMK.03/2002 on the basis for calculation, collection and remittance of value added tax on delivery of tobacco products.

DECIDES :

To stipulate :

DECREE OF THE MINISTER OF FINANCE ON DESIGNATION OF DUTY RATE AND BASIC PRICES OF TOBACCO PRODUCTS.

CHAPTER I GENERAL PROVISIONS

Article 1

In this decree, the meaning of :

1. Minister, Director General, Customs & Excise Officer, Cigarette Manufacturer, Mechanically-Produced CloveFlavoured Cigarette (SKM), MechanicallyProduced PureTobacco Cigarettes (SPM), Clove -Flavoured Cigarette Produced by means other than machine or Manually-produced Clove -Flavoured Cigarettes (SKT), Pure-Tobacco Cigarette produced by means other than machine or Manually-produced pure tobacco cigarette (SPT), Kelembak Kemenyan (Cigarette Made of Tobacco and Incense Resin) (KLM), Cigars (CRT), Klobot (cigarette wrapped by dry corn husk/KLB), Sliced Tobacco (TIS), Other Tobacco Processed Products (HPTL), Excise Tape, Excise Documents, Floor Price, and Retail Price (HJE) are as set forth in Law No. 11/1995 on excise affairs.

2. Office is the local Customs and Excise Service Office.

3. Importer is a person or corporation having permit in the form of Excisable Entrepreneur Registry Number from the Minister to import tobacco products.

4. Minimum Retail Price (HJE) is the lowest HJE value determined by the Minister for each type of tobacco products produced by certain category of manufacturers.

5. Retail Sale is the activity of selling tobacco products directly to the final consumer, without taking into consideration total of tobacco products, which are sold and purchased.

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7. Factory Production is production of each type of tobacco products, which is computed based on document of order of cigarette revenue stamps of tobacco products.

8. CK-1 Excise Document is a document of order of excise tapes of tobacco products

9. CK-8 Excise Document is document of notification on release of excisable goods having their excise not yet settled, from the factory or storing places for export purpose.

10. Factory Production Limit is limit of production of each type of tobacco products computed based on document or order of excise tapes of tobacco products in a calendar year prior to the fiscal budget year..

CHAPTER II

CLASSIFICATION OF MANUFACTURERS Article 2

(1) Tobacco manufacturers shall be classified into categories of manufacturers based on type of tobacco products produced by the relevant, according to the limit of factory production as set forth in Attachment I to this decree.

(2) Promotion of category of ma nufacturers must be adjusted by the manufacturers when factory production in the current calendar year, has exceeded the limit of factory production applicable to the category of the relevant manufacturers.

(3) In case that production in a calendar year is less than the limit of factory production applicable to category of manufacturers, the said manufacturers are allowed to degrade to category of manufacturers by a decision of the head of office at the beginning of the following calendar year.

(4) Degradation of category of manufacturers as set forth in paragraph (3) only can be granted to one level lower than the previous category.

Article 3

(1) The head of office must collection of shortages in the calculation of payment of excise and other state levies, which arise from the promotion of category of manufacturers as set forth in Article 2 paragraph (2) and the collection task shall be assigned to the Directorate General for Customs and Excise.

(2) In the case of the collection of the shortage of payment as set forth in paragraph (1), administrative sanction in the form of fine shall not be included.

CHAPTER III

FLOOR PRICES, HJE, AND MARKET TRANSACTION PRICE Article 4

Floor prices used for the calculation of duty on tobacco products are retail prices (HJE).

Article 5

(1) Decree on stipulation of HJE of new brands and stipulation of increase in HJE, either those issued prior to or after enforcement of this decree, shall be declared void, if the relevant manufacturers or importers have never realize order of excise tapes by using CK-1 Excise Document, or has never exported their tobacco products by using CK-8 Excise Document over 6 (six) month consecutively.

(2) In order to enable manufacturers or importers to re- use HJE of brands of tobacco products, which have been declared void, as set forth in paragraph (1), the manufacturers or the importers must re-submit applications for stipulation of HJE in accordance with the applicable provisions and procedures.

(3) The manufacturers or the importers shall be prohibited from reducing HJE, which is still applicable to brands of their tobacco products.

(3)

(1) HJE of each type of SKM, SKT and SPM, which are still applicable to each category of manufacturers, as set forth in Attachment I to this decree, shall be increased as follows :

1. SKM of Categories I, II and III, Rp. 75.00 (seventy five rupiahs), Rp. 60.00 (sixty rupiahs) and Rp. 50.00 (fifty rupiahs) per cigarette respectively.

2. SPM of Categories I, II and III, Rp. 75.00 (seventy five rupiahs), Rp. 60.00 (sixty rupiahs), and Rp. 50.00 (fifty rupiahs) per cigarette respectively.

3. SKT of Categories I, II, III/A and III/B, Rp. 60.00 (sixty rupiahs), Rp. 50.00 (fifty rupiahs), Rp. 40.00 (forty rupiahs), and Rp. 25.00 (twenty five rupiahs) per cigarettes respectively.

(2) In case that categories of the manufacturers as set forth in Article 2 paragraphs (3) and (4) degrading at the beginning of the following calendar year, the increase in HJE as set forth in paragraph (1) shall be adjusted to the degradation of categories of manufacturers.

Article 7

(1) The provisions on minimum HJE as stipulated Attachment II to this decree shall apply to the respective types of tobacco products by categories of manufacturers.

(2) HJE of new brands belonging to manufacturers or importers cannot be lower than the HJE applicable to brands of their tobacco products.

Article 8

(1) In case that Market Transaction Price has exceeded HJE, the manufacturers or the importers must make adjustment by filing an application for stipulation of an increase in HJE.

(2) If results of monitoring by the customs and excise officer found that a Market Transaction Price has exceeded HJE, the Director for Excise Affairs, on behalf of the Director General, may inform this matter to the relevant manufacturers or importers by using a general notification letter.

(3) If, in 30 (thirty) days after date of receipt of the notification letter as set forth in paragraph (2), the manufacturers, importers, or their proxies give no response or file no applicatio n for stipulation of an increase in HJE, the Director General may stipulate an increase in HJE of the relevant tobacco products, which have been adjusted to the prevailing market transaction price.

Article 9

Provisions on the stipulation of HJE are to be further stipulated by a decision of the Director General.

CHAPTER IV TARIFFS OF EXCISE

Article 10

Tariffs of excise on every type of local tobacco products in the current budget year is as specified in Attachment II to this decree.

Article 11

(1) Excepted from the provisions as set forth in Article 10 is the tariffs of excise on each type of tobacco products produced locally for the current fiscal year with the total not exceeding the total production of the same types marketed locally before the current fiscal year.

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(3) The total export of tobacco products as set forth in paragraph (1) shall be calculated on the basis of the realization of export by using CK-8 Excise Document.

(3) The total quantity of tobacco products marketed locally as specified in paragraph (1) shall calculated on the basis of CK-1 Excise Document.

Article 12

Tariffs of excise and the limit of minimum HJE of each type of imported tobacco products in the current fiscal year are as specified in Attachment IV to this decree.

CHAPTER V

HJE AND TARIFFS OF EXCISE ON TOBACCO PRODUCTS DISTRIBUTED FREE-OF-CHARGE TO FACTORY EMPLOYEES OR THIRD PARTIES AND TOBACCO PRODUCTS FOR EXPORT PURPOSE

Article 13

(1) HJE of tobacco products, which are given free-of-charge to factory employees, shall be set at 50% (fifty percent) of HJE of the same type and brand of tobacco products designated for domestic market.

(2) The maximum quantity of tobacco products, as set forth in paragraph (1) shall be set at :

a. 300 (three hundred) cigarettes per month for permanent employees or monthly employees; or b. 100 (one hundred) cigarettes per month for daily employees or contract workers.

(3) HJE of tobacco products, which are given free-of-charge to third parties, shall be set at 75% (seventy- five percent) of HJE of the same type and brand of tobacco products designated for domestic market.

(4) The maximum quantity of tobacco products, as set forth in paragraph (3) shall be set 0.01% (one per ten thousandth) of the total factory production in a calendar year prior to the current fiscal year.

(5) Tariffs of excise on tobacco products, as set forth in paragraph (1) and (3) shall be stipulated the same as the rate of excise on the same type and brands of tobacco products designated for domestic market.

Article 14

HJE and tariffs of excise of tobacco products for export purpose (being marketed abroad) shall be set at the same rates as HJE and tariffs of excise on the same type and brand of tobacco products designated for domestic market.

CHAPTER VI

FINAL RESULT OF CALCULATION OF HJE Article 15

The final result of calculation of HJE per retail package shall be rounded up in a multiplication of Rp. 100 (one hundred rupiahs).

CHAPTER VII

VALUE ADDED TAX ON DELIVERY OF TOBACCO PRODUCTS Article 16

(1) With regard to the basis for calculation, collection, and remittance of value added tax on delivery of tobacco products, the provisions as set forth under decree of the minister of finance No. 62/KMK.03/2002, including its amendments shall apply.

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CHAPTER VIII CLOSING

Article 17

With the enforcement of this decree, Decree of the Minister of Finance No. 597/KMK.04/2001 on stipulation of tariffs of excise and floor prices of tobacco products, which has been amended the latest by Decree of the Minister of Finance No. 121/KMK.04/2002, shall be declared null and void.

Article 18

This decree comes into full force and effect from November 1, 2002.

For public cognizance, this decree shall be announced by placing it in the State Gazette of the Republic of Indonesia.

Stipulated in Jakarta On October 24, 2002

THE MINISTER OF FINANCE sgd.

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ATTACHMENT I

CATEGORY OF TOBACCO PRODUCT MANUFACTURERS Type of Tobacco

Products

Category of Manufacturers

Limit of Factory Production

I More than 2 billion cigarettes

a. S K M II More than 500 million cigarettes, but not more than 2 billion cigarettes

III Not more than 500 million cigarettes

b. S P M II More than 500 million cigarettes, but not more than 2 billion cigarettes

III Not more than 500 million cigarettes

c. S K T II More than 500 million cigarettes, but not more than 2 billion cigarettes

III A. More than 6 million cigarettes, but not more than 500 million cigarettes

B. Not more than 6 million cigarettes

d. KLM, KLB or SPT I More than 6 million cigarettes II Not more than 6 million cigarettes

e. T I S I More than 2 billion grams

II More than 500 million grams, but not more than 2 billion grams

III A. More than 50 million grams, but not more than 500 million grams

B. Not more than 50 million grams

f. C R T No category Without limit of productions

g. H P T L No category Without limit of productio ns

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ATTACHMENT II TARIFFS OF EXCISE AND LIMIT OF RETAIL PRICES

OF LOCALLY PRODUCED TOBACCO PRODUCTS Type of

Tobacco Products

Category of manufacturers

Minimum HJE per Piece/Gram

Tariffs of Excise

a. SKM I Rp. 400.00 40%

II Rp. 330.00 36% III Rp. 320.00 26%

b. SPM I Rp. 270.00 40%

II Rp. 210.00 36% III Rp. 200.00 26%

c. SKT I Rp. 340.00 22%

II Rp. 280.00 16% III/A Rp. 270.00 8% III/B Rp. 200.00 4%

d. KLM, KLB or SPT

I Rp. 150.00 8%

II Rp. 125.00 4%

e. TIS I Rp. 30.00 20%

f. CRT No category Rp. 200.00 20%

g. HPTL No category Rp. 200.00 20%

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ATTACHMENT III TARIFFS OF EXCISE AND LIMIT OF RETAIL PRICES OF TOBACCO PRODUCTS

PRODUCED LOCALLY ON MANUFATURERS ABLE TO EXPORT

THEIR TOBACCO PRODUCTS IN A QUANTITY EXCEEDING PRODUCTION OF TOBACCO PRODUCTS OF THE SAME TYPE TO BE DESIGNATED

FOR LOCAL MARKET IN A CALENDAR YEAR PRIOR TO CURRENT FISCAL YEAR

Type of Tobacco Products

Category of Manufacturers

Tariffs of Excise

a. SKM I Rp. 400.00 36%

II Rp. 330.00 32% III Rp. 320.00 22%

b. SPM I Rp. 270.00 36%

II Rp. 210.00 32% III Rp. 200.00 22%

c. SKT I Rp. 340.00 18%

d. KLM, KLB or SPT

I Rp. 150.00 4%

II Rp. 120.00 0%

e. TIS I Rp. 30.00 16%

II Rp. 30.00 12%

III/A Rp. 30.00 4% III/B Rp. 20.00 0%

f. CRT No category Rp. 200.00 16%

g. HPTL No category Rp. 200.00 16%

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ATTACHMENT IV DUTY RATE AND LIMIT OF RETAIL SELLING PRICES

OF IMPORTED TOBACCO PRODUCTS Type of Tobacco

Products

Tariff of Excise

a. SKM Rp. 400.00 40%

b. SPM Rp. 270.00 40%

c. SKT Rp. 340.00 22%

d. KLM, KLB or SPT Rp. 150.00 8%

e. TIS Rp. 30.00 20%

f. CRT Rp. 200.00 20%

g. HPTL Rp. 200.00 20%