By Ryan Mandela and Alda Humaira Razzak
In order to increase the investment and boosting up the national economy, the government is providing exemption from import duty on import of machinery, goods and materials for industrial development in relation to the investment. The granting of import duty facilities on new imported machinery could be granted as long as it has not been manufactured domestically, has been manufactured domestically but has not met the specification requirements, or has been manufactured domestically but the quantity is not sufficient for industrial needs. This article aims to provide the readers a glimpse of understanding for the procedures of applying exemption of import duty on new imported machinery by laying out its regulations, general procedures, and timeline.
B General Procedures to Apply the Exemption of Import Duty on New Imported Machinery
In regards to obtain the exemption from import duty on new imported machinery, there are two approaches which are through Ministry of Industry and OSS RBA, in this chapter will be explained from each approach and when each approach will be used.
B1 General Procedures to Apply through the Ministry of Industry Approach
In regards to obtain the exemption from import duty on new imported machinery, the applicant should upload the endorsement from the Ministry of Industry in the OSS RBA as regulated in BKPM Regulation No.4 of 2021 regarding Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities (“PerBKPM 4/2021”). To determine whether the endorsement from the Ministry of Industry is required, the applicant should check the HS Code of new machinery in the attachment of Minister of Industry Regulation No. 32 of 2020 regarding Amendment of Minister of Industry Regulation No. 19/M-IND/PER/2/2010 on List of Machinery, Goods, and Materials Domestically Produced for Industrial Development in the context of Investment (“MOI 32/2020”). 
If the HS Code of new machinery is not listed in the MOI 32/2020, then the applicant is not required to obtain such endorsement. Otherwise, if the HS Code of new machinery is listed in the MOI 32/2020, then the applicant is required to obtain such endorsement first and submit the documents to the Ministry of Industry as listed in the Minister of Finance Regulation Number 176/PMK.011/2009 regarding Exemption of Import Duty on Imported Machinery, Goods and Materials for Development Or Industrial Development in the context of Investment as amended several times and latest amended by Minister of Finance Regulation Number 188/PMK.010/2015 on Second Amendment over Minister of Finance Regulation Number 176/PMK.011/2009 regarding Exemption of Import Duty on Imported Machinery, Goods and Materials for Development or Industrial Development in the context of Investment (“MOF Regulation 176/2009”) , as follows:
- Deed of Establishment;
- Investment Approval Letter;
- Taxpayer Registration Number (NPWP) and receipt of submission as a Taxpayer;
- Custom Registration Number (NIK);
- Importer Identification Number (API/APIT/API-P);
- List of machinery includes the total, type, technical specifications details per port; and
- Brief description of the production process.
Practically, the Ministry of Industry will require other documents such as tax analysis, brochure of each new imported machinery, price of each new imported machinery (in USD and Rupiah), company investment plan and analysis of the advantages of importing new machinery. After submitting all the required data and information, the Ministry of Industry shall appoint a PIC to handle and proceed all the documents. The applicant shall liaise with the appointed PIC to complete and/or submit other data if the Ministry of Industry states that the current data are not sufficient. After being declared complete, the Ministry of Industry will request a response and a statement letter from the relevant industry association stating that the machinery submitted by the applicant cannot be manufactured domestically and qualified to receive the endorsement. If the relevant industry association declares that the machinery submitted by the applicant cannot be manufactured domestically, then the Ministry of Industry shall issue the endorsement.
B2 General Procedures to Apply through the Online Single Submission Risk-Based (“OSS-RBA”)
After the applicant receives the endorsement from the Ministry of Industry, the applicant shall upload the endorsement in the OSS RBA along with all the necessary documents related to the new imported machinery and production process.  In the process of applying for the exemption of import duty through the OSS RBA, the applicant should also answer some technical questions directly on their OSS RBA account. Moreover, OSS RBA shall conduct technical clarification to review and decide whether the application is approved, incomplete, or rejected no later than 5 (five) days. The system also will submit a request to complete the deficiency if the results are preliminary. If within 5 (five) days there is no notification to complete the deficiency or complete the missing information from the application, the OSS RBA shall automatically issue the decree of the minister of finance regarding the exemption of machinery import duty for domestic investment. 
C Timeline to Obtain the Decree on Granting the Exemption of Import Duty
In general, the estimated time for the entire process to obtain the endorsement from the Ministry of Industry (if necessary) could take more than 2 (two) months until obtain the decree from the OSS RBA. However, if the new imported machinery does not require an endorsement from the Ministry of Industry, the applicant could directly fill in the data and upload the required documents in the OSS RBA, then within 5 (five) days since the documents are declared complete and correct, the OSS RBA shall automatically issue the decree as mentioned above.
The overall timeline as above is only for new imported machinery, as for the second-hand machinery there will be different procedures and data to be completed by the applicant.
D Suggestion and Conclusion
To conclude, the entire process regarding the exemption of import duty on new imported machinery could take more than 2 months if required to obtain the endorsement from the Ministry of Industry. If the new imported machinery is not required to obtain the endorsement, the process only takes 5 (five) days. In addition, it should also be noted that the issuance of a decree on granting import duty facilities on the import of machinery shall be obtained before the notice import (Pemberitahuan Impor Barang) is issued. Further, the applicant should prepare all documents regarding the imported machinery in detail, so there is no missing information and it is feasible to be assisted by our team for more details to obtain the exemption of import duty. We hope that this gives a basic understanding of how to apply the exemption of import duty on new imported machinery.
 Article 67 Paragraph (3) PerBKPM 4/2021
 Article 7 MOF Regulation 176/2009
 Attachment VIII PerBKPM 4/2021
 Article 74 PerBKPM 4/2021