NewsCase StudiesEvents

Non-Fiscal Facilities Imposed on Industry Sector

Also in the news...

Space Transportation Solutions and Innovations

The market for space transportation is growing exponentially. Here in this article, we look at different innovations and solutions to likely problems regarding space transport. The future’s bright with all sorts of interesting ideas.

Get proof of origin for your goods

If you’re using a preference from a preference agreement or the Generalised Scheme of Preferences, you will need to prove the origin of your goods.

Claiming preferential rates of duty between the UK and EU

How to claim preferential rates of duty on goods covered in the UK's deal with the EU and how to declare goods imported into the UK on your import declaration.

A Step By Step Guide To Forex Trading

Forex Market is also known as Foreign Exchange Market or Currency Trading Market.

Obtaining A Business License In Italy: The Ultimate Guide

Obtaining a business license in Italy: what you need to know

Non-Fiscal Facilities Imposed on Industry Sector

Back to News

By Arien Kartika Sari

Following the implementation of Law No. 3 Year 2014 on Industry, the government has issued Government Regulation No. 2 of 2017 on Development of Industrial Infrastructure and Facilities (“GR 2/2017”). This regulation is focused on industrial standardization, the National Industry Information System, and non-fiscal facilities granted to Industrial and Industrial Zone Companies.

In the spirit of creating a competitive industry through standardization of industrial goods and services, GR 2/2017 sets out the rules for industrial standardization that is implemented in the form of the Indonesian National Standard (Standar Nasional Indonesia or “SNI”), Technical Specification and Procedural Guidelines.

SNI is typically a voluntary certification, unless stipulated otherwise by the relevant technical authorities. The Ministry of Industry is in charge of supervising all aspects of the implementation of the voluntary and mandatory SNI, either at the factory or market-level. If the report of such supervision shows the industrial goods and/or services to be non-compliant with the mandatory SNI, Technical Specification and/or Procedural Guidelines, the business is obliged to suspend production of such goods/services within 3 days since the notification and to remedy such non-compliance. If such non-compliance is found at the market-level, the business is obliged, at their own cost, to withdraw the sale of such goods within 1 month of the notification, and/or stop any importation of the goods within 3 days. If the goods have a high risk of making a direct negative impact on the safety of consumers, the authority is entitled to immediately withdraw the product from the market. Violation of this obligation may result in an administrative fine of up to IDR 1 billion, temporary closure, suspension, and/or revocation of the industrial license.

On the issue of the National Industry Information System, GR 2/2017 stipulates that every Industrial Company, as well as Industrial Zone Company, must routinely submit data and information regarding their business to the minister of local government through the National Industry Information System. The Minister then will publish such information, except for any information that may harm the Industrial Companies to protect them from a violation of intellectual property and unfair business competition.

Under GR 2/2017, non-fiscal facilities may be given to any industrial companies who have obtained an Industrial Business License (Izin Usaha Industri) or an Industrial Zone Business License (Izin Usaha Kawasan Industri), and fully paid all tax obligations. Other criteria may apply, such as the commitment to externalize the concept of green industry, export-orientation, location in rural or border areas, optimalization of the use of local goods and/or services, etc. The non-fiscal facilities as set forth in this regulation are as follows:

  1. training to improve knowledge and skills of the human resources;
  2. professional competency certification;
  3. transfer of production rights of a technology for which the patent license is held by the central and/or regional government;
  4. supervision of safety for operational activities to ensure the smooth operation of production process (if its considered to be a vital national object);
  5. for small and medium-sized businesses, product certification and/or technical standard;
  6. development of physical infrastructure for small and medium-sized businesses and Industrial Zone Companies located in rural or border areas; and/or
  7. promotional assistance of production results or location.

To apply for non-fiscal facilities, Industrial Companies or Industrial Zone Companies must submit an application to obtain non-fiscal facilities to the Ministry of Industry, technical ministry, governor, and/or regent or mayor as the grantor of such facilities.

Article supplied by BUDIARTO Law Partnership

You are not logged in!

Please login or register to ask our experts a question.

Login now or register.