WORLD TRADE G/SCM/N/16/IDN
13January 1997
ORGANIZATION(97-0088)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
NOTIFICATIONS PURSUANT TOARTICLE XVI.1 OFTHE GATT 1994
AND ARTICLE 25OFTHE AGREEMENT ONSUBSIDIES AND
COUNTERVAILING MEASURES
INDONESIA
Thefollowingnotification,dated28October1996,hasbeenreceivedfromthePermanentMission
ofIndonesia.
_______________
Indonesia hereby submits twonotifications asfollows:
1. Thegranting ofimport dutyrelief tocertain parts andaccessories ofmotor vehicles forthe
assembling and/or manufacturing ofmotor vehicles, asstipulated inDecree oftheMinister
ofFinance No.645/KMK.01/1993; Decree oftheMinister ofIndustry No.114/M/SK/6/1993.
2. Development oftheNational Automobile Industry, asstipulated inPresidential Decree
No.42/1996 dated 4June1996; President Instruction No.2/1996 dated 19February 1996;
Government Regulation No.36/1996 dated 4June1996; Government Regulation No.20/1996
dated 19February 1996; Decree oftheMinister ofIndustry and Trade
No.31/MPP/SK/2/1/1996 dated 19February 1996.
Introduction
Theperiod towhich thefollowing information applies is30June1996through 29June1997.
Asprovided byArticle 25.7oftheSCM Agreement, notification ofthemeasure herein does
notprejudge either itslegalstatus under GATT 1994 andtheSCM Agreement (including Article 27
thereof), theeffects under theSCM Agreement, orthenature ofthemeasure itself.
Notified subsidy programme
Title
TheGranting ofImport Duty Relief toCertain Parts andAccessories ofMotor Vehicles for
theAssembling and/or Manufacturing ofMotor Vehicles.G/SCM/N/16/IDN
Page2
Authority
1. Decree oftheMinister ofFinance No.645/KMK.01/1993;
2. Decree oftheMinister ofIndustry No.114/M/SK/6/1993.
Form ofsubsidy
Import dutyrelief tocertain partsandcomponents ofmotor vehicles fortheassembling and/or
manufacturing ofmotor vehicles which uselocalcontents.
Subsidy perunit
AsprovidedintheDecreeoftheMinisterofFinanceNo.645/KMK.01/1993thecustomsimport
dutyofcertain parts andaccessories ofmotor vehicles isimposed attheratesof0percent, 25per
cent, 40percent, 60percent, 80percentand100percentdepending onthecategory ofthemotor
vehicle andlocalcontent rateswhich areusedintheirassembling and/or manufacturing.
Policy objectives
Theobjectives are(1)tosupport andencourage thedevelopment ofthedomestic automotive
industry and/or thecomponent industry; (2)toenhance theefficiency oftheassembly industry ofmotor
vehicles, andtoenhance theefficiency oftheindustry ofmotor vehicles andoftheir parts and
accessories, aswellaswithin theframework ofsaving foreign exchange, including theincreased use
ofdomestically produced components.
Duration ofsubsidy
Import dutyrelief shallbeimposed until1January 2000.
Trade effects
Itisnotpossibletodeterminewhat,ifany,tradeeffectsmayeverresultfromthenotifiedsubsidy
programme.
Notified subsidy programme
Title
Development oftheNational Automobile Industry
Authority
1. Presidential Decree No.42/1996 dated 4June1996;
2. Presidential Instruction No.2/1996 dated 19February 1996;
3. Government Regulation No.36/1996 dated 4June1996;
4. Government Regulation No.20/1996 dated 19February 1996;
5. Decree oftheMinister ofIndustry andTrade No.31/MPP/SK/2/1996 dated 19February 1996.G/SCM/N/16/IDN
Page3
Form ofSubsidy
Exemption from Luxury Taxof:
1. Sedans andstation wagons having engines ofcylinder capacity oflessthan1,600 cc,withlocal
content ofmore than60percent;
2. Jeep, combi, minibus, vanandpickup which aredomestically produced withlocalcontent of
more than60percent; and
3. "national motor vehicles".
Exemption of"Pioneer Companies" from customs import dutyofcomponents permitted to
beimported (i.e.those inexcess ofdesignated localcontent rates).
Subsidy perunit
Asprovided inGovernment Regulation No.36/1996 dated 4June1996, luxury taxonmotor
vehicles isimposed attheratesof20percent,25percentand35percentdepending onthecategory
ofthemotor vehicle.
Thecustoms import dutyapplicable todifferent categories ofmotor vehicles issetoutinthe
attachment tothisnotification.
Policy objective
Theobjectiveistosupportdevelopmentofthedomesticautomotiveindustry,includingincreased
useofdomestically produced components.
Duration ofsubsidy
Presidential Decree No.42/1996 dated 4June1996, specifies thatthebenefits provided therein
shallbegranted foramaximum period ofoneyear. TheDecree oftheMinister ofIndustry andTrade
No.31/MPP/SK/2/1996 dated 19February 1996 provides benefits foraperiod ofthree years.
Trade effects
Itisnotpossibletodeterminewhat,ifany,tradeeffectsmayeverresultfromthenotifiedsubsidy
programme.