Directorate of Customs and Excise Circular Letter on Traditional Alcoholic Beverage Supervision

The Directorate of Customs and Excise Circular Letter No. SE-4/BC/2011 on Traditional Ethyl Alcohol Beverages as Non Duty Collected Goods (“Circular Letter”) was issued to implement Law No. 11 of 1995, as amended by Law No. 39 of 2007, on Excise (Excise Law). So as to ensure that Traditional Ethyl Alcohol (TEA) beverages, which are a major source of income for many traditional communities, are not subject to duties.

Pursuant to Item E (1) (a), in order to be classified as TEA, the following criteria have to be met: the beverage is from a simple process of fermentation and distillation, the production of which serves the end-needs of the community; daily production does not exceed 25 liters; and it is not packaged for retail sale. This Item suggests that Tuak, Cap Tikus and others traditional ethyl alcohol beverages fall under the category of ETA.

Additionally, Item E (1) (b), stipulates that a producer of TEA is exempt from the obligation to secure a taxable goods producer registration number (Nomor Pokok Pengusaha Barang Kena Cukai / NPPBKC).

The Authority supervising the implementation of the Circular Letter pursuant to Item E (2), is the General Service Office (Kantor Pelayanan Umum / KPU) or the Customs and Excise Supervision and Service Office (Kantor Pengawasan dan Pelayanan Bea dan Cukai / KPPBC).  Where, in the course of such supervision, a database will be compiled (as elaborated on in Item E (2) (a)), and will be updated quarterly (as elaborated on in Item E (2) (b)).

Pursuant to Item E (2) (c), the supervision of traditional alcoholic beverage production and retail will be conducted by KPU/KPPBC in cooperation with the relevant local governments.

The Circular Letter contains two appendixes, setting out the database format and the supervision form.

The Circular Letter has been in force since 24 March 2011.