CUSTOMS AND EXCISE: WHAT ARE THE DIFFERENCES?
Customs and excise are two different types of state levies. However, the general public often mistaken Customs and Excise as both customs and excise are under the supervision of the Directorate General of Customs and Excise, as stipulated in Article 1 number (10) and (11) of Law Number 17 of 2006 concerning Amendments to Law Number 10 of 1995 concerning Customs (Customs Law) and Article 1 number (12) and (15) of Law Number 39 of 2007 concerning Amendments to Law Number 11 of 1995 concerning Excise (Excise Law). Therefore, what are Customs and Excise, and what differentiate the two?
According to the definition, Duty is a state levy that is imposed on the entry and exit of related goods/commodities entering and leaving the customs area. On the other hand, Excise is a state levy that is imposed on certain goods which have the nature or characteristics stipulated in the Excise Law. The Customs and Excise are regulated on different legal regulation. Customs are regulated in the Customs Law, while Excise is regulated in the Excise Law.
Based on the object, duties are imposed on goods resulting from export-import activities. Imported goods are subject to Import Duty, while exported goods are subject to Export Duty. This has been regulated in Article 1 numbers (15) and (15a), Article 2, Article 2A and Article 3 of the Customs Law. On the contrary, the object of Excise Tax is regulated in Article 2 paragraph (1) of the Excise Law, which states that Excise Tax is imposed on goods that have properties or characteristics whose consumption needs to be controlled, their circulation needs to be monitored, their use can have a negative impact on society or the environment, or their use needs to be imposed by state levies for the sake of justice and balance. The goods subject to Excise are:
- ethyl alcohol or ethanol, regardless of the material used and the manufacturing process;
- beverages containing ethyl alcohol in any amount, regardless of the ingredients used and the manufacturing process, including concentrates containing ethyl alcohol;
- tobacco products, which include cigarettes, cigars, leaf cigarettes, sliced tobacco, and other tobacco processing products, regardless of whether substitutes or auxiliary materials are used in their manufacture.
Regardless of the differences, Customs and Excise serves to optimize state revenue in the form of Import Duties, Exit Duties, and Excise to support national development. In addition, Customs and Excise levies also function as a tool to control domestic market prices, suppress import exports, and reduce the circulation and consumption of certain goods that have the potential to endanger environmental health, public order and comfort.