Imports of industrial goods for power industry exempted from tax

The government has issued a ministerial decree that exempts imports of industrial goods for power plant industry from tax. The decree, signed by Minister of Financi Sri Mulyani Indrawati, has come into effect retroactively as of Aug. 18.

?The regulation is for public interests in order to help develop power plant industry and secure the supply of electricity by corporations, including state owned electricity company PLN (PT Perusahan Listrik Negara),? spokesman for the finance ministry Harry Z. Soeratin said in a press statement on Monday.

The exemption is awarded to PLN, holders of IUKU that has operating areas, IUKU that has signed Power Purchase Agreement (PPA) or Finance Lease Agreement (FLA) and IUKU for power plant industry that has signed PPA with IUKU that has operating areas.

IUKU is the permit to produce and distribute power to public. The permit is issued by the Ministry of Energy and Mineral Resources.

To apply for the exemption, applicants have to write to the Tax and Excise Office. Realization of import must not exceed 24 months since the tax exemption is awarded, but is extendable for a maximum of 12 months since the expiry of the import realization date.

The director general of tax and excise will approve an application within 14 days after the application is received in accordance with the requirements. Applicants will be notified of any rejection.

Power plant industry covers production and provision of electricity for public interests, excluding transmission, distribution and electricity supporting business.

Capital goods refers to built-up or knock down engines, equipment and factory equipment, excluding spare parts for maintenance. (godang)