The Risk of Aggregated Tax Invoices: Why the Court Rejected PT LSHB’s Penalty Waiver Request?

PT LSHB Tax Dispute: Validity of Administrative Sanctions Under Article 14 of the KUP Law on Aggregated Tax Invoices

This dispute focuses on the validity of imposing administrative sanctions under Article 14 Paragraph (4) of the KUP Law, amounting to 2% of the Tax Base due to non-compliance in Tax Invoice issuance. PT LSHB filed a lawsuit following the rejection of its request to waive administrative sanctions in the VAT STP for the October 2016 Tax Period. The core conflict lies in the interpretation of the Taxpayer's status as a "Retailer," which would allow the issuance of aggregated Tax Invoices without complete buyer identification.

Arguments of the Parties: Retailer Criteria and E-Faktur Version 1.0 Technical Constraints

The Defendant (DGT) argued that PT LSHB is a distributor delivering goods to business entities such as hotels, minimarkets, and restaurants, thus failing to meet the criteria of Government Regulation No. 1 Year 2012 as a trader selling to "end consumers." Conversely, the Plaintiff claimed that they factually conducted retail sales and faced technical constraints with the e-Faktur version 1.0 application, which they believed could not record transactions without a buyer's TIN (NPWP).

Legal Considerations of the Board: Buyer Characteristics and Zero NPWP Technical Data

In its legal considerations, the Board of Judges emphasized that Retailer status is determined by the characteristics of the buyers as end consumers. Based on the evidence of the transaction counterparty list, the Board found that the buyers were corporate tax subjects who processed or resold the goods; therefore, the "Aggregated Tax Invoice" facility could not be applied. Regarding the system constraints, the Board referred to technical data proving that the e-Faktur application had accommodated the "zero NPWP" (00.000.000.0-000.000) since 2015.

Crucial Implications for Distributors: Risk of Categorization and Article 36 of the KUP Law

This decision has crucial implications for distributor Taxpayers to be more selective in categorizing retail transactions. Failure to include the identity of buyers who are not end consumers carries a high risk of triggering administrative sanctions that cannot be waived through the mechanism of Article 36 Paragraph (1) of the KUP Law if negligence or non-compliance with juridical criteria is proven.

Conclusion: Oversight Criteria and Solid Basis for Lawsuit Rejection

In conclusion, a request for penalty waiver can only be granted if the Taxpayer can prove an oversight that was not due to their own fault. In this case, non-compliance with the Retailer criteria and the availability of adequate technical features provided a strong basis for the Board of Judges to reject the lawsuit.

A Comprehensive Analysis and the Tax Court Decision on This Dispute Are Available Here