WORLD TRADE G/SCM/N/16/IDN/Suppl.1
19March 1998
ORGANIZATION(98-1119)
Original: English Committee onSubsidies
andCountervailing Measures
SUBSIDIES
Notifications Pursuant toArticle XVI.1 oftheGATT 1994
andArticle 25oftheAgreement onSubsidies and
Countervailing Measures
INDONESIA
Supplement
Thefollowing notification, dated 25February 1998, hasbeenreceived from thePermanent
Mission ofIndonesia.
_______________
Iwritetoofficially inform youthaton21January 1997, myGovernment terminated allsubsidies
previously granted totheNational Automobile Industry. Accordingly, thesecond ofthetwosubsidy
programmes notified totheCommittee byIndonesia onOctober 1997(document G/SCM/N/16/IDN,
dated 13January 1997) isnolonger ineffect. Thisletter should beconsidered asformal modification
ofthatnotification.
Forthebenefit oftheCommittee and,given theexistence ofadispute regarding Indonesia 's
national carprogramme, forthebenefit oftheDSBChairman, thePanel andtheother parties tothe
dispute, Iwillelaborate ontheactions taken bymyGovernment. Under authority ofPresidential
Instruction No.2/1996 (19February 1996), Indonesia tooksteps in1996 toestablish anational car
industry. Companies qualifying asproducers ofanational carwereexempt frompayment ofcustoms
import duties andsales taxonluxury goods. ThisInstruction wasimplemented through anumber
ofregulations anddecrees.
On21January 1998, myGovernment tookthefollowing actions:
- PresidentialDecreeNo.20/1998revokedPresidentialDecreeNo.42/1996(4June1996)
anddeclared Presidential Instruction No.2/1996 (19February 1996) obsolete, thereby
terminating theauthority forfurther import dutyandluxury taxexemption subsidies
toproducers ofanational car.
- Minister ofIndustry andTrade Decree No.19/MPP/Kep/1/1998 revoked (effective
2February 1998) Minister ofIndustry andTrade Decree No.31/MPP/SK/2/1996
(19February 1996) andalldepartmental regulations issued pursuant toittoimplement
Presidential Instruction No.2/1996.G/SCM/N/16/IDN/Suppl.1
Page2
- Minister ofIndustry andTrade Decree No.20/MPP/Kep/1/1998 revoked (effective
2February 1998) Minister ofIndustry andTrade Decree No.142/MPP/Kep/6/1996
(5June1996), which hadauthorized production ofnational carstobecarried out
overseas foraone-year period, inimplementation ofPresidential Decree No.42/1996.
(This decree already hadterminated byitsownterms.)
- Government Regulation No.14/1998 amended Government Regulation No.50/1994
(28December 1994), aspreviously amended byGovernment Regulation No.20/1996
(19February 1996) andbyGovernment Regulation No.36/1996 (14June1996), so
astoeliminate (effective 2February 1998) theexemption ofnational carsfrompayment
oftheluxury salestax.
- Minister ofFinance Decree No.19/KMK.01/1998 revoked (effective 2February 1998)
Minister ofFinance Decree No.404/KMK.01/1996 (7June1996), which hadexempted
national carsproduced overseas (during theone-year period specified inMinister of
Industry andTrade Decree No.142/MPP/Kep/6/1996) frompayment ofthecustoms
import duty. (This decree already hadterminated byitsownterms.)
- MinisterofFinanceDecreeNo.20/KMK.01/1998amendedMinisterofFinanceDecree
No.36/KMK.01/1997 (21January 1997) todelete (effective 2February 1998) the
authority toexempt parts andcomponents forassembly ormanufacture ofnational
carsfrom payment ofthecustoms import duty.
Iinclude copies ofallthedecrees andregulations issued on21January toterminate these
subsidies.G/SCM/N/16/IDN/Suppl.1
Page3
PRESIDENTIAL DECREE NUMBER 20/1998
ON
REVOKING THE PRESIDENTIAL DECREE NO.42/1996
REGARDING THE PRODUCTION OFTHE NATIONAL CAR
THE PRESIDENT OFTHE REPUBLIC INDONESIA,
Considers thatconsecutive tothere-formatting andre-structuring thenational economy,
itisconsidered important torevoke thePresidential Decree number 42/1998
regarding theProduction oftheNational Car:
With reference to Article 4paragraph (1)ofthe1945 Constitution:
DECIDES
Toissue: THEDECREEOFTHEPRESIDENTONREVOKINGTHEPRESIDENTIAL
DECREE NO.42/1996.
Article 1
Revoking thePresidential Decree No.42/1996 ontheProduction oftheNational Car.
Article 2
With therevoking ofthePresidential Decree No.42/1996 ontheProduction oftheNational Caras
intended byArticle 1,hence, thePresidential Instruction No.2/1996 ontheDevelopment oftheNational
CarIndustry isobsolete.
Article 3
ThisPresidential Decree shallcome intoforce asofthedateofissue.
Issued inJakarta
On21January 1998
THE PRESIDENT OFTHE REPUBLIC OFINDONESIA
sgd.
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Page4
THE MINISTER OFINDUSTRY AND TRADE
THE DECREE OFMINISTER OFINDUSTRY AND TRADE
NUMBER: 19/MPP/Kep/1/1998
ON
REVOKING THE MINISTER OFINDUSTRY AND TRADE DECREE
NUMBER: 31/MPP/SK/2/1996 ONTHE NATIONAL CAR
MINISTER OFINDUSTRY AND TRADE OF
THE REPUBLIC OFINDONESIA
Considers: a. thatconsecutive tothenational economic reformation itisconsidered
important torevoke theMinister ofIndustry andTrade Decree number:
31/MPP/SK/2/1996.
b. thatforthatpurpose itisnecessary toissueanewMinister ofIndustry
andTrade Decree
With reference to 1. LawNo.5/1984 onINDUSTRY;
2. Government Regulation No.17/1986 ontheAuthority overIndustrial
Regulation, Stimulation andDevelopment;
3. Government Regulation No.14/1998 regarding themodification on
Government Regulation No.50/1996 ontheImplementation ofLaw
No.8/1983 regarding theValue Added Taxongoods andservices and
theLuxury Sales Taxasmodified bytheLawNo.11/1994, asithas
beenfinally modified byGovernment Regulation No.36/1996;
4. Presidential Decree No.45/1972 ontheConfirmation ofAuthority
andResponsibility forFostering theDevelopment andGrowth ofthe
Automotive andHeavy Duty Equipment Industrial Sector;
5. Presidential Decree No.44/1974 onthePrinciples ofOrganization of
Government Departments;
6. Presidential Decree No.96/M/1993 ontheFormation ofthesixth
Development Cabinet asamended byPresidential Decree No.
388/M/1995;
7. Presidential Decree No.2/1996 ontheAmendment ofPresidential
Decree No.15/1984 ontheOrganizational Structure ofGovernment
Departments amended twenty-five times, thelatest suchamendment
being byPresidential Decree No.61/1995;
8. ThePresidential Decree No.20/1998 ontheRevoking thePresidential
Decree No.42/1996 regarding theProduction oftheNational Car;
9. TheMinister ofIndustry andTrade Decree No.29/MPP/Kep/2/1996
juncto No.92/MPP/Kep/4/1996 regarding theOrganization and
Operational Procedure oftheMinistry ofIndustry andTrade.G/SCM/N/16/IDN/Suppl.1
Page5
DECIDES
Toissue MINISTER OFINDUSTRY AND TRADE DECREE ONTHEREVOKING
THE MINISTER OFINDUSTRY AND TRADE DECREE NO.
31/MPP/SK/2/1996 REGARDING THE NATIONAL CAR.
Article 1
Revoking theMinister ofIndustry andTrade Decree No.31/MPP/SK/2/1996 regarding theNational
Car.
Article 2
Byissuing thisdecree, alltheregulations stated inMinister ofIndustry andTrade Decree
No.31/MPP/SK/2/1996 arenolonger valid.
Article 3
Thisdecree shallcome intoforce asof2February 1998.
Forpublic cognizance thisdecree shallbeannounced bypublication intheStateGazette oftheRepublic
ofIndonesia.
Issued inJakarta
On21January 1998
MINISTER OFINDUSTRY AND TRADE
sgd.
T.ARIWIBOWOG/SCM/N/16/IDN/Suppl.1
Page6
THE MINISTER OFINDUSTRY AND TRADE
THE DECREE OFMINISTER OFINDUSTRY AND TRADE
NUMBER: 20/MPP/Kep/1/1998
ON
REVOKING THE MINISTER OFINDUSTRY AND TRADE DECREE
NUMBER: 142/MPP/Kep/6/1996 ONTHE PRODUCTION OF
THE NATIONAL CAR
THE MINISTER OFINDUSTRY AND TRADE OF
THE REPUBLIC INDONESIA
Considers: a. thatconsecutive tothenational economic reformation itisconsidered
important torevoke theMinister ofIndustry andTrade Decree number:
142/MPP/Kep/6/1996;
b. thatforthatpurpose itisnecessary toissueanewMinister ofIndustry
andTrade Decree.
With reference to 1. LawNo.5/1984 onINDUSTRY;
2. Government Regulation No.17/1996 ontheAuthority overIndustrial
Regulation, Stimulation andDevelopment;
3. Government Regulation No.14/1998 regarding themodification on
Government Regulation No.50/1996 ontheImplementation ofLaw
No.8/1993 regarding theValue Added Taxongoods andservices and
theLuxury Sales Taxasmodified bytheLawNo.11/1994, asithas
beenfinally modified byGovernment Regulation No.36/1996;
4. Presidential Regulation No.45/1972 ontheConfirmation ofAuthority
andResponsibility forFostering theDevelopment andGrowth ofthe
Automotive andHeavy Duty Equipment Industrial Sector;
5. Presidential Decree No.44/1974 onthePrinciples ofOrganization of
Government Departments;
6. Presidential Decree No.96/M/1993 ontheFormation ofthesixth
Development Cabinet asamended byPresidential Decree
No.388/M/1995;
7. Presidential Decree No.2/1996 ontheAmendment ofPresidential
Decree No.15/1984 ontheOrganizational Structure ofGovernment
Departments amended twenty-five times, thelatest suchamendment
being byPresidential Decree No.61/1995;
8. ThePresidential Decree No.20/1998 ontheRevoking thePresidential
Decree No.42/1996 regarding theProduction oftheNational Car;
9. TheMinister ofIndustry andTrade Decree No.29/MPP/Kep/2/1996
juncto No.92/MPP/Kep/4/1996 regarding theOrganization and
Operational Procedure oftheMinistry ofIndustry andTrade.G/SCM/N/16/IDN/Suppl.1
Page7
DECIDES
Toissue: MINISTER OFINDUSTRY AND TRADE DECREE ONTHEREVOKING
THE MINISTER OFINDUSTRY AND TRADE DECREE NO.
142/MPP/Kep/6/1996 REGARDING THEPRODUCTION OFNATIONAL
CAR
Article 1
RevokingtheMinisterofIndustryandTradeDecreeNo.142/MPP/Kep/6/1996regardingtheProduction
ofNational Car.
Article 2
Thisdecree shallcome intoforce asof2February 1998.
Forpublic cognizance, thisdecree shallbeannounced bypublication intheStateGazette oftheRepublic
ofIndonesia.
Issued inJakarta
On21January 1998
MINISTER OFINDUSTRY AND TRADE
sgd.
T.ARIWIBOWOG/SCM/N/16/IDN/Suppl.1
Page8
GOVERNMENT REGULATION
NO.14/1988
CONCERNING
THE AMENDMENT OFGOVERNMENT REGULATION NO.50/1994 ONTHE
IMPLEMENTATION OFLAW NO.8/1993 ONVALUE ADDED TAX ON
GOODS AND SERVICES AND SALES TAX ONLUXURY GOODS AS
ALREADY ATTHE LATEST BYGOVERNMENT REGULATION
NO.36/1996
THE PRESIDENT OFTHE REPUBLIC OFINDONESIA
Considering: Intheview ofnational economic reformation andrestructurization itis
necessarytoamendGovernmentRegulationNo.50/1994ontheimplementation
ofLawNo.8/1993 onvalue added taxongoods andservices andsales tax
onluxury goods aslatest amended byGovernment Regulation No.36/1996.
Intheviewof: 1. Article 5paragraph (2)oftheconstitution of1945.
2. Government Law No.50/1994 ontheimplementation ofLaw
No.8/1993 onvalue added taxongoods andservices andsales tax
onluxury goods, asalready amended byLawNo.11/1994, aslatest
amended byGovernment Regulation No.36/1996.
Tostipulate: TheGovernment Regulation concerning theamendment ofGovernment
Regulation No.50/1994 ontheimplementation ofLawNo.8/1993 onvalue
added taxongoods asalready amended byLawNo.11/1994, aslatest amended
byGovernment Regulation No.36/1996.
Article 1
Article 23paragraph (4)shallbeamended sothatitentirely reads asfollows:
Article 23
(4) Sales taxonluxury goods shallbeborne bygovernment fordomestically produced formotor
vehicles ofpassenger vehicle andstation wagon withengine displacement lessthan1600 cc
using localcontent more than60percentandformotor vehicles ofjeep,combi, minibus van
andpick-up domestically produced withlocalcontent more than60percent.G/SCM/N/16/IDN/Suppl.1
Page9
Article 11
ThisGovernment Regulation shallcome intoforce on2February 1998.
Forpublic cognizance thisGovernment Regulation shallbepromulgated bypublishing itinthestate
gazette oftheRepublic ofIndonesia.
Stipulated inJakarta
On21January 1998
ThePresident oftheRepublic ofIndonesia
SOEHARTOG/SCM/N/16/IDN/Suppl.1
Page10
THE MINISTER OFFINANCE
THE DECREE OFMINISTER OFFINANCE OF
THE REPUBLIC OFINDONESIA
NUMBER: 19/KMK.01/1998
ON
REVOKING THE MINISTER OFFINANCE DECREE
NUMBER: 404/KMK.01/1996 REGARDING THE EXEMPTION
ONIMPORT DUTY ONCARS INACCORDANCE WITH
THE NATIONAL CAR PROGRAMME
MINISTER OFFINANCE OF
THE REPUBLIC OFINDONESIA
Considers: thatconsecutive tothenational efficiency forpromoting national product
competitiveness, itisconsidered important torevoke theMinister ofFinance
Decree No.404/KMK.01/1996.
With reference to: 1. LawNo.10/1995 onCUSTOMS (theState Gazette oftheRepublic
ofIndonesia Number 75/1995, theYearStateGazette oftheRepublic
ofIndonesia Number 3612);
2. Presidential Decree No.20/1998 regarding theRevoking Presidential
Decree No.42/1996 concerning theProduction oftheNational Car;
3. Minister ofFinance Decree No.440/KMK.05/1996 regarding the
DeterminingtheGoodsClassificationSystemandtheAmountofImport
Duty onImported Goods asamended andmodified, asithasbeen
finally modified by the Minister ofFinance Decree
No.603/KMK.01/1997.
Regarding to: theletter ofMinister ofMinister ofIndustry andTrade No.40/MPP/1/1998
issued on21January 1998.
DECIDES
Toissue: THEMINISTEROFFINANCEDECREEONREVOKINGTHEMINISTER
OFFINANCE DECREE NO. 404/KMK.01/1996 REGARDING THE
EXEMPTIONONMINISTEROFFINANCEDECREENO.19/KMK.01/1998.
IMPORT DUTY ONTHE IMPORTATION OFCAR RELATED
TOTHE NATIONAL CAR PROGRAMME
Article 1
Revoking theMinister ofFinance Decree No.404/KMK.01/1996 regarding theExemption onImport
Duty forcarsimported related totheNational CarProgramme.G/SCM/N/16/IDN/Suppl.1
Page11
Article 2
ThisDecree shallcome intoforce asof2February 1998.
Forpublic cognizance, thisDecree shallbeannounced bypublication intheStateGazette oftheRepublic
ofIndonesia.
Issued inJakarta,
On21January 1998
MINISTER OFFINANCE
sgd.
MAR'IEMUHAMMADG/SCM/N/16/IDN/Suppl.1
Page12
MINISTRY OFFINANCE DECREE OFTHE REPUBLIC
OFINDONESIA
NUMBER: 20/KMK.01/1998
REGARDING1
THE AMENDMENT OFMINISTRY OFFINANCE DECREE
NUMBER 36/KMK.01/1997 ONTHE GRANTING OFIMPORT DUTY
RELIEF TOCERTAIN PARTS AND ACCESSORIES OFMOTOR VEHICLES
FOR THE ASSEMBLY AND ORMANUFACTURING OFMOTOR VEHICLES
THE MINISTRY OFFINANCE
Considering: Tosupportmotorvehiclescompetitivenessofdomesticallyproducedfornational
efficiency therefore itneeds toamend theMinistry ofFinance Decree
No.36/KMK.01/1997 specifically forgranting import dutyrelief tocertain
partsandaccessories ofmotor vehicles fortheassembly andormanufacturing
ofnational motor vehicles.
Inviewof: 1. Lawnumber 10/1995 onCUSTOMS (State Gazette oftheRepublic
ofIndonesia 1995 number 75,number 3612);
2. TheMinistry ofFinance Decree number 440/KMK.05/1996 onthe
systemofclassificationsofgoodsandtheratesofimportdutyonimport
goods, ashasbeenamended andadded intheMinistry ofFinance
Decree number 603/KMK.01/1997.
With reference to: TheMinistry ofIndustry andTrade letter number 40/MPP/1/1998 dated
21January 1998.
DECIDES
Tostipulate: THE DECREE OFTHE MINISTER OFFINANCE CONCERNING THE
AMENDMENT OFTHE DECREE OFMINISTRY OFFINANCE NO.
36/KMK.01/1997 ONIMPORT DUTY RELIEF TOCERTAIN PARTS AND
ACCESSORIES OFMOTOR VEHICLES FORTHEASSEMBLY AND OR
MANUFACTURE OFMOTOR VEHICLES
Article 1
Theamendment ofArticle 4oftheDecree oftheMinistry ofFinance No.36/KMK.01/1997 sothat
itentirely reads asfollows:
"Article 4
Theamount oflocalcontent forassembly andormanufacturing ofmotor vehicles, asstated inArticle 2
andArticle 3shallbedecided byMinistry ofIndustry andTrade andeffective foraperiod of1(one)
year".
1Mkeu2098/mydocuments/bu.G/SCM/N/16/IDN/Suppl.1
Page13
Article 11
ThisDecree shallcome intoforce onthedateof2February 1998.
Forpublic cognizance, thisDecree willbeannounced bypublishing itintheStateGazette oftheRepublic
ofIndonesia.
Stipulated inJakarta,
On21January 1998
TheMinistry ofFinance
MAR'IEMUHAMMAD
__________