Import duty, as a state levy on imported goods, plays a crucial role in filling state coffers and protecting domestic products. This article will discuss in detail about import duties, with a special focus on specific tariffs, which is a method of determining import duties based on the unit of goods.
Definition of Import Duty
Import duty, in accordance with the Customs Law, is a state levy imposed on imported goods. Import itself is the activity of bringing goods into the customs area.
Import duty not only serves as a source of state revenue but also as a tool to protect the domestic economy from the impact of imported goods.
Import Duty Tariffs: Advalorem and Specific
Based on the Customs Law, import duty tariffs can be imposed based on advalorem (percentage) tariffs or specific tariffs, or a combination of both. Our focus here is on specific tariffs.
What is a Specific Tariff?
A specific tariff is an import duty tariff imposed based on the unit of goods. In this case, the amount of the tariff will be stated per unit of goods, allowing for clear and precise calculations.
Examples of Specific Tariff Implementation: Sugar, Rice, and Cinematographic Films
In the implementation of specific tariffs, the Minister of Finance determines whether a good uses an advalorem or specific tariff. A small number of imported commodities, such as rice, sugar, and cinematographic products, utilize specific tariffs.
Specific Tariff for Sugar
Sugar is subject to a specific tariff based on the specifications of the goods. This ensures that certain types of sugar are subjected to tariffs according to their quality.
Specific Tariff for Rice and Cinematographic Films
Rice and cinematographic films, on the other hand, are subjected to a single tariff for all specifications of the goods. For example, in July 2019, the specific tariff for rice was set at IDR 450 per kilogram.
Read More: Understanding Indonesia National Single Window (INSW)
Specific Tariffs in Import Duty Calculation
To understand the calculation of import duties with specific tariffs, let’s look at a case example. Importer A imports 5,000 tons of Thai Hom Mali rice from Thailand at a CIF price of THB 12,000 per ton. The import duty tariff for rice is 450 per kilogram.
Import Duty = (Number of Units × Import Duty Rate)
= (5,000 tons × 1,000) × 450/kg
= IDR 2.25 billion
Goods Classification and HS Code
To facilitate the determination of import duty tariffs, imported goods are classified in a systematically compiled goods classification list. The Harmonized Commodity Description and Coding System (HS) is this system, ensuring clarity in the customs process.
Conclusion
By understanding import duties and specific tariffs, business actors can manage their imports more efficiently. The use of specific tariffs provides clarity in the calculation of import duties, while goods classification with HS Code simplifies the administrative process. As a strategic step, a deep understanding of customs regulations becomes key to the smoothness and sustainability of international business.
Thus, the discussion on Specific Tariffs in Import Duty Calculation concludes.
Indonesia Customs website here.
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Topic: import duty, specific tariff, Indonesia customs, HS Code, import regulations, sugar tariff, rice tariff, cinematographic films, customs law, import calculation