Taxable Goods Counting: Definition, Process, and Implementation

Taxable Goods Counting Definition, Process, and Implementation

Counting taxable goods is an essential step in maintaining accuracy and compliance with taxation regulations in Indonesia. In relation to this, Law Number 39 of 2007 concerning Amendments to Law Number 11 of 1995 concerning Excise Tax grants authority to customs and excise officials to conduct counting on certain taxable goods.

Definition of Taxable Goods Counting

According to the Explanation of Article 20 paragraph (1) of the Excise Law in conjunction with Article 1 number 1 of the Ministry of Finance Regulation (PMK) No. 205/PMK.04/2020, counting is an activity to determine the quantity, type, quality, and condition of taxable goods. In this regard, the specific taxable goods subject to counting include ethyl alcohol and beverages containing ethyl alcohol (MMEA).

Taxable Goods Counting Process

The counting process is carried out on two main aspects. First, on ethyl alcohol in the factory or storage place. Second, on domestically produced Group A MMEA within the factory already packaged for retail sale and subject to excise. Factories and storage places are described as follows:

Factory: Specific places including buildings, yards, and fields used to produce taxable goods (BKC) in the form of ethyl alcohol or MMEA and/or to package BKC in the form of ethyl alcohol or MMEA for retail sale.
Storage Place: Places, buildings, and/or fields not part of the factory, used to store taxable goods in the form of ethyl alcohol still subject to excise with the intention of distribution, sale, or export.
Timing of Counting Implementation

Counting implementation can be conducted at four different times, in accordance with Article 2 paragraph (2) of PMK 205/2020:

  • No later than the 10th of every quarter, namely in January, April, July, and October, for the preceding 3-month period.
  • At any time upon request from factory entrepreneurs or storage place entrepreneurs.
  • At any time if there is strong suspicion of violation of excise regulations.
  • Before and after loading onto a ship for export purposes.
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Implementation of Taxable Goods Counting

Counting is conducted by customs and excise officials based on a duty letter issued by the head of the office overseeing the factory or storage place. During the counting process, factory entrepreneurs or storage place entrepreneurs must present all ethyl alcohol or MMEA located in the factory or storage place and provide necessary manpower and equipment.

Documentation of Counting Results

The results of counting conducted by customs and excise officials are recorded in 2 copies of counting result reports. Additionally, the counting results must also be reconciled with the excise goods ledger. This ledger serves as a record of the quantity of specific taxable goods, such as ethyl alcohol and MMEA, produced, inputted, outputted, as well as deductions, shortages, and excesses of counting results from a factory or storage place.

Conclusion

Counting taxable goods is a crucial activity to maintain accuracy and compliance with taxation regulations in Indonesia. When conducting counting, it’s important to understand the processes and regulations in accordance with the Excise Law and related regulations. This helps in avoiding potential tax manipulation or evasion and ensures state revenue from the excise sector aligns with expectations.

Indonesia Customs website here.
Collection of Indonesia customs consultations here.

Topic: Taxation, Excise Law, Tax Compliance, Taxable Goods, Indonesia

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