Sunday, 10 May 2009

Director General of Customs and Tax Urged to Decide PCC Food Grade

APKI [Indonesia Pulp and Paper Association] urged the Director General of Customs and Tax to determine Precipitated Calcium Carbonate food grade ex Schaefer Kalk Malaysia which was used as industrial raw materials for cigarette paper for PT PDM Indonesia with import tax of 5% [HS 2836.50.10.00]. So far PT PDM Indonesia [formerly PT Kimsari Paper Indonesia], a foreign investor company [PMA] in Medan produced cigarettes papers only by using PCC food grade produced by Schaeffer Kalk Malaysia which were already certified by Schaeffer Kalk [Certificate of Conformity from ISEGA Germany] by the verdict of Indonesia’s tax Court.

Since its establishment, PT PDM Indonesia used PCC food grade [calcium carbonate – food Quality] HS 2836.50.10.00 with 10% import tax, 10% value added tax imported only from Schaeffer Kalk factory [Malaysia] Sdn. Bhd. Import process ran smoothly except in 2004 when the Custom and Tax Dept that PCC imported by PDM Indonesia did not originate from food grade and had to use HS 2836.90.90.00 upon which import tax of 10% was imposed. PT PDM Indonesia raised objection and brought the case to the tax court in Jakarta. The Tax Court decided that based on supporting facts, the PCC imported by PT PDM Indonesia from Schaeffer Kalk Factory Malaysia was PCC Food Grade and that the HS used [HS 2836.50.10.00 with import tax 5%] was true.
Recently the Custom and Tax Dept imposed NHI [Notice of Intelligence] that PCC food grade so it was necessary to use HS 2836.90.90.00 by paying 10% of import tax. According to some reports by APKI, in fact the PCC imported by PT PDM Indonesia was the same old PCC, which was imported from Schaeffer Kalk Malaysia.With the absence of Customs rules on PCC food grade with HS 2836.50.10.00 the import tax imposed was 5% - so the factory was threatened to stop production and dismiss the workers.

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