Do you have any questions in regards to customs clearance or wondering how to calculate customs in Indonesia, this article able to help you answer a few of the questions, and please do not hesitate to post any question in regards to customs clearance in Indonesia below. Here is some question that was taken from an article from the Indonesian custom page.
What is brokerage custom duty operation and how much is the customs duty price need to I pay for my goods?
Brokerage custom duty service means that the shipping company will calculate the tax and negotiate with the customs duty officer based on your declaration of invoices prior to shipping. With this service, the customer does not need to worry to handle the customs duty hassle as the shipping agency will help negotiate the tax and providing the necessary documents with the customs official.
Can I ship like vitamins, essential oil, herbs to Indonesia?
By rules, you need to have the proper documentation from the Indonesian Trading Ministry or Health Ministry to import any goods related to human use whether it is herbal, natural, etc. But if you import the goods in little amount for personal use, we can help you obtain the proper permit to import the goods to Indonesia.
If my goods are on customs processing, who will inform me about the updates?
Usually is your shipping agency will update you in regards to the matter or you can always check it online with real-time based on your tracking number provided (if any). Usually when it stated that the status on the website as “package are in customs clearance”, you can expect to take a minimum between two to three days to clear from customs duty.
What if my goods been confiscated by custom or I receive the goods in partial only?
It would be better to check again with your shipping agency and make sure what is the main reason your goods are confiscated by custom and if you do not feel satisfied with the customs duty answer, you can appeal to the respective department and get the answer directly from the custom officer
If you received the goods in partial it would be best to check with shipping agency and confirm with them whether your goods held in custom, for how long, is there any feedback from the custom in regards of your shipment or is there any product that custom duty officer declares with your shipping agency that has taken due to some reason and get really clear about the situation. Most importantly, always check the box condition while you receive the goods and make the complaint to the shipping agency immediately to trace back why you do not receive the complete shipment or how is it possible that some of your goods have been missing during shipment or transit.
What is “green light” and “red light” means while importing to Indonesia?
This term widely uses by shipping agencies related to the shipping industry to Indonesia. The terms are to determine whether an increase than the regular check from a customs duty officer related to the shipping period. The red light period means there might be more checks while in transit which able to make the shipment delayed.
Actually, the real terms that been used by customs duty officer is a green channel, yellow channel, red channel based on Indonesian custom duty information websites. The Green channel means only documentation will be checked as the goods will be cleared immediately. Usually, in these terms, the importer already been in the industry for a few years and has a goods report and conduct with customs duty. The importer also off the red channel list and every shipment has immediate approval from a customs duty officer. It is good to plan for importers to be able to keep up a good report with the customs duty of Indonesia which can be cleared to green channel clearance.
Yellow channel (warning) means another documentation needed before it can be cleared. If the shipment under the yellow channel, the goods are cleared but the importer needs to produce extra documents so the goods can be cleared by the custom duty officer.
Red channel means a physical check of the goods is required on every shipment that coming to the country. Usually, this channel is for the new importer or any importer that have falsely the documents before or been in some illegal case with the customs duty officer. Other factors are changes in tax, regulation, HS code number, etc.
What is the maximum amount on the invoice allowed to be able to obtain free import duties to Indonesia?
For shipping personal goods or parcels, it is USD 3 per person per shipment CIF (cargo, insurance, freight) but if you flying with the goods, you can obtain up to USD 250 via the airport.
CIF consists of (cargo, insurance, freight). Cargo means the cargo price in terms of the invoice price of agreement between seller and buyer when the goods imported to the country and it should be able to compare to the market price on a particular time by the customs duty officer. Insurance means the insurance (if any) for the particular shipment during importing. Sometimes, a customs duty will look at the insurance price and compared it with the invoice price as a comparison. High insurance but low invoice price will raise some suspicion in regards to the true value of the goods as the invoice can be undervalued to avoid tax. Freight means the price of shipment from the origin country to Indonesia. And all of the charges totaled and you will get CIF amount that the customs duty will use for calculating the tax.
Amount of USD 3 that the Indonesian government allowed to obtain free tax compared to the countries around Indonesia is comparably low, as Singapore has free custom duty up to SGD 400 = USD 250, Malaysia up to MYR 500 = USD 130, Philippines PHP 10,000 = USD 200. Perhaps the purpose and measurement with a low allowance on import tax are so the Indonesian government able to increase country income from import tax (custom and duty) and to have controlled the movement of import goods in the country as stated in the Indonesian custom websites.
How to calculate the custom import duties?
- Invoice or transaction CIF amount (Cargo, Insurance, Freight) as the shipper need to produce the documentation needed during the importing process, if the goods found without any proper documentation, some risk involved are the goods might be confiscated, return to the shipper, or held in custom for quite some time.
- The customs duty officer will be able to determine based on the market value on the time of import if no full documentation produced upon checks by customs duty officer or if the officer has doubts on the invoice amount stated on the importation documents that very low (undervalue) from the market price of the imported goods.
How to calculate the import tax for every good in one shipment if the goods imported more than one (1) item?
- Custom tax calculated based on the HS code of particular goods on import (you can access it at Indonesia custom duty websites.
- If the HS code type is more than one, the customs officer will determine the tax rate on which one is the highest between particular goods that imported.
It is important to be as clear as possible in the invoice tax paper during declaration or before you ship the goods to Indonesia as to help the shipping company to be able to declare the goods easily without any problem with customs duty officer as lack of documentation able to make some shipment delay on the process.
How much is the imported rate for Goods and Service Tax?
10% for Goods and Service Tax – VAT based on the Indonesian government tax code.
How much is income import tax?
The import tax will be varied depends on whether the recipient of the goods has the API (registration of import) or not. API has usually given to companies to import industrial or company scale goods that have been regulated by the Indonesian government with a strict allowance or general cargo. Another documentation is NPWP (national tax registration code) that issued to companies or individuals to report yearly tax payments and such. Tax value is varied based on whether the recipient able to produce both documentation as listed:
- if the owner of the goods has API (the registration of import) and able to show NPWP (national tax registration code number), it will be given of 2,5% tax from import value.
- if the owner of the goods has API but can’t show the NPWP, import rate is 5%
- if the owner of goods don t have API but own NPWP, the tariff would be 10%
- If the owner of the goods do not have both, the import tariff would be 20% from import value
Note: The facility of USD 3 free tax import custom only for personal goods not for companies importing goods to Indonesia.
Based on the list above, if you have the registration of import and national tax registration code you only need to pay 2,5 % compared if you do not have both you need to pay 20% from total value but keep in mind, mostly the one that has both documentation is a large corporation or companies that regularly importing the goods to Indonesia.
Some Cases of Shipping to Calculate the Tax:
I buy goods USD 550 with shipment charges USD 50 with EMS Cargo (Pos Indonesia). How much do I need to pay for duties? (I have NPWP but not API)
Rate 1 USD: Rp. 10.000,00
Income tax 22 10%
Import GST 10%
Import duties 7,5%
Cost of goods USD 500, free up USD 75 = USD 425. (Cost)
Shipping Charges USD 50 (Freight)
Insurance: 0,5% x (Price after deduction of allowance of tax + shipping charges) = 0,5 x USD 475 = USD 23,75.
Value of Taxable (CIF) = 498,75 x Rp. 10.000,00 = Rp. 4,987,500
Import duties = 10% x Value = Rp. 498,750,00
Import Value = Value of Taxable + Import duties = Rp. 4,987,500,00 + Rp. 498,750,00 = Rp. 5.486.250
Import GST (Good and Service Tax/ VAT) = 10% x Import Value= Rp. 548,625,00
Income Import tax = 7,5% x Import Value = Rp. 415,000,00 (rounded up)
Import custom duty that needs to be paid: Rp 963,625.00
What if the goods need additional documentation for import from other government agencies?
If the goods fall under the list of prohibited and limited items for import, the importer needs to obtain an additional import license from some of the local agencies for importation to Indonesia. Without the license paper, it is almost impossible to bring goods to Indonesia. A few examples of import license: BPOM license from Indonesian Health Agency, Quarantine paper from Agriculture or Fishery Agency, Trading License from Trading Ministry, etc. It is important to be able to seek approval of shipping before you commence the shipping to Indonesia as without proper shipping documents there will be a lot of risks involved during the shipping.
How to appeal for customs charges or tax as your goods invoice is lower as declared by customs officer?
First, you need to appeal with the shipping company which you use the service to ship the goods to Indonesia maximum 3 days after the declaration in writing with the reasons as the shipping company represent you as an importer and if your appeal is approved, the customs officer will recalculate (revision) the value and declaration invoice and there is a new amount you need to pay.
Based on previous experience and reports, some of the cases are approved but the majority of cases are not approved in regards to the rate of the successful applicant of the tax duty appeal case. The documentation that you need to represent must be quite assuring for custom and duty officers. As usually when the customs duty has determined the value of your shipment for the first time, the customs officer will refer back to the first judgment on why determining the tax previously.
What if I purchase the goods together and separate the shipping but come together at once in Indonesia?
The customs officer will combine the airway bill and charge it as one shipment and documents, as the rule of thumb applies for USD 3 waived of tax is based on per day per shipment per person. As long as the recipient name stated on the airway bill, the customs officials have the right to combined it and look the case as one shipment. It would be better if you can send it on different dates of shipping as to obtain free custom tax duties up to USD 3 per shipment per day per recipient.
What if my shipment is a gift from abroad to Indonesia?
Customs charges will put the value as the market price in the moment of importation, except if the goods have no economic value at all. Even if you think that there is no value for the goods please ensure to declare the value of the goods with the shipping company, even samples or extra bonus goods have a value in custom duty officer. Keep in mind to always, always, put value in your shipping goods for custom duty purposes.
Is there any exception to shipping goods for the importation tax scheme?
- Goods for commercial as there s no USD 3 free tax charges as the facility is only for personal goods.
- Sample product (no import tax for the sample in small quantities).
Keep in mind to always put value even for the sample, the custom duty officer will determine whether the tax will be waived for the sample product for the laboratory tests, a sample for business, etc.
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