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16 January 2017

Government Introduces Regulatory Framework on Bonded Logistics Centres

As part of the second economic stimulus package introduced by the government last September aimed at boosting the country's economy, the government issued Government Regulation No. 85 of 2015 which amends Government Regulation No. 32 of 2009 on Bonded Storage Places ("Regulation 85"). Regulation 85 introduces the concept of Bonded Logistics Centres (Pusat Logistik Berikat) as one type of Bonded Storage Places (Tempat Penimbunan Berikat) in Indonesia. A Bonded Storage Place is basically a building, site or area that meets certain requirements which is used to store goods for certain purposes and obtains import duty postponement. Previously, there were only six types of Bonded Storage Place, namely:

  1. Bonded Warehouse (Gudang Berikat)

  2. Bonded Zone (Kawasan Berikat)

  3. Bonded Exhibition Area (Tempat Penyelenggaraan Pameran Berikat)

  4. Duty Free Shop (Toko Bebas Bea)

  5. Bonded Auction Place (Tempat Lelang Berikat)

  6. Bonded Recycling Zone (Kawasan Daur Ulang Berikat)

It is expected that the introduction of the Bonded Logistics Centre would encourage investment in the manufacturing sector in Indonesia because these centres would facilitate the flow of basic materials. At present many industrial companies keep their materials or products in bonded storage units in Singapore and Malaysia.

Things to Know About Bonded Logistics Centres

  1. Operation and Business

    1. Regulation 85 defines a Bonded Logistics Centre as a Bonded Storage Place to store goods originating from outside the Indonesian customs area and/or goods from other places in the Indonesian customs area, which may be accompanied with one or more simple activities, for a certain period of time for later removal.

    2. The operation of a Bonded Logistics Centre is carried out by a Bonded Logistics Centre operator having the status of an Indonesian legal entity and domiciled in Indonesia.

    3. In one Bonded Logistics Centre, one or more businesses may be conducted.

    4. Business in a Bonded Logistics Centre is conducted by:

      • a Bonded Logistics Centre entrepreneur(s); or

      • a Bonded Logistics Centre entrepreneur also acting as operator.

    5. A Bonded Logistics Centre entrepreneur can store imported goods or goods from other places in the Indonesian customs area for a certain period for later removal. The storing activity can be accompanied with one or more simple activities.

  2. Customs and Tax Treatment

    1. The following facilities are granted when goods from outside the Indonesian customs area enter into a Bonded Logistics Centre:

      1. postponement of import duty;

      2. non-collection of Value Added Tax (VAT), Sales Tax on Luxury Goods and Article 22 income tax on import; and

      3. exemption from excise duty.

    2. The following facilities are granted when goods from other Bonded Logistics Centres enter into a Bonded Logistics Centre:

      1. postponement of import duty;

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