Appeal Won! PT UBS's Strategy in Facing VAT Base Corrections for Gold Jewelry Amid Allegations of Weak Customer Identity Evidence

Tax Dispute: VAT Base (DPP) "Other Value" Scheme and Material Truth in Gold Jewelry Exchange for PT UBS

This dispute originated from a tax audit of PT UBS (formerly PT KGS) for the September 2018 tax period, where the Respondent corrected the VAT Tax Base (DPP) by IDR 28.9 billion. The core conflict lies in the interpretation of the "Other Value" tax base scheme under Article 4 paragraph (2) of PMK-30/PMK.03/2014, which allows VAT to be charged only on the margin of gold jewelry if there is an exchange of 24-karat gold bars. The Respondent rejected this scheme, arguing that the Petitioner could not prove the material truth of the exchange transactions due to the lack of complete customer identities (ID cards), gold purity certificates, and CCTV footage as primary supporting evidence.

Core Conflict: Formal Documentation vs. Substantive Raw Material Submission

The Petitioner firmly countered with the argument that PMK-30/PMK.03/2014 does not require detailed customer identity evidence or CCTV recordings to utilize the specific tax base scheme. The Petitioner stated that all commercial documents, such as Purchase Orders and Sales Invoices, included the notation "Titip Emas 24K" (24K Gold Deposit), which substantively proves the submission of raw materials by customers. Furthermore, the Petitioner emphasized that the evidentiary standards demanded by the Respondent exceeded the common practices in the gold jewelry manufacturing industry.

Judicial Resolution: Economic Substance Over Regulated Formalities

In its consideration, the Board of Tax Judges stated that the Respondent had improperly shifted the burden of proof. Based on the results of the On-Site Examination (Descente), the Board found that the Petitioner possessed adequate gold purity testing infrastructure and consistent administrative procedures. The Board opined that the absence of customer ID cards does not automatically nullify the taxpayer's right to use the tax base scheme under Article 4 paragraph (2) of PMK-30/PMK.03/2014, as long as the substance of the exchange transaction can be proven through other supporting documents and physical inspection.

Implications: Legal Certainty and Precedents for the Gold Industry

This decision reinforces that legal certainty in the application of tax regulations must prioritize economic substance over formalities not explicitly regulated. The implication for Taxpayers is the importance of maintaining internal document consistency and the readiness of operational supporting facilities that can be physically verified during a dispute. This victory provides an important precedent that corrections based on administrative assumptions without strong evidence regarding the material untruth of transactions cannot be sustained before the Board of Judges.

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