Imports of goods tax-free gas exploration

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Imports of goods tax-free gas exploration

Wednesday, 03 February 2010 09:26

JAKARTA: The government bears the value added tax (VAT) payable on imported goods used for the upstream oil and gas (oil) as well as business activities of geothermal exploration.
Finance Minister Sri Mulyani Indrawati stated this clearly in PMK 24/PMK.011/2010 published on January 29, 2010 and valid until December 31, 2010.

"To increase the production of oil and gas and geothermal, should provide fiscal incentives to the upstream activities," said Finance Minister in the PMK is derived Business yesterday.

Budget allocations provided by the government is providing the facility in order VAT DTP Rp2, 5 trillion, which was included in the 2010 state budget heading.

Ministry of Finance confirmed the granting of facilities VAT DTP (borne by the government) is only valid for two types of entrepreneurs in the fields of business activities that bind upstream oil and gas cooperation contracts with the Indonesian government after the enactment of Law No. 22/2001 on Oil and Gas.

Entrepreneurs in the field of geothermal activities that have binding contracts with the Government of Indonesia, or received permission geothermal business after December 31, 1994, or businessmen in the geothermal field is getting assigned to carry out a preliminary survey of the Indonesian government.

Moreover, imported goods must meet three criteria in order to obtain this facility. First, the goods can not be produced domestically. Second, these goods are produced in the country but do not meet the required specifications. Third, the goods are produced domestically but not sufficient for the number of industries.

Other provisions, the goods must be imported are listed in the notice of import customs who have obtained registration from the Office of Supervision and the Customs Service or Home Service Office of Customs port of entry into force since this PMK.

VAT in addition to DTP, the government has set out four criteria for the assessment of fiscal incentives in the form of customs duties borne by the government to industry specific sectors that had been budgeted in the 2010 Budget Rp3 trillion.

Ministry of Finance through the PMK No. 07/PMK.011 / BM 2010 DTP insists can only be given to certain sectors of industry on the import of goods and materials used to produce goods and services with the criteria of 4 types of assessment criteria.