Countering Revenue Corrections: Why LME Prices on Invoices Can Be Overturned by Tax Court Judges?

Tax Dispute: VAT Tax Base (DPP) and LME Selling Price Interpretation for PT TMS

The issuance of an Additional Underpayment Tax Assessment Notice (SKPKBT) for VAT regarding the September 2012 Tax Period against PT TMS triggered a legal dispute over the interpretation of the Tax Base (DPP). The Respondent applied a positive correction to export and local sales, arguing that the selling price must follow the higher LME value between the order date or the invoice date. Legally, this dispute centers on the application of Article 1 point 18 of the VAT Law regarding the definition of Selling Price and revenue recognition under PSAK 23.

Core Conflict: Spot Prices vs. Contractual Purchase Orders

The conflict arose when the Respondent used LME spot prices on specific dates not agreed upon by the parties, while PT TMS maintained that the price was binding since the issuance of the Purchase Order (PO). In its consideration, the Board of Judges emphasized that based on transaction documents, the valid selling price is the price agreed upon in the contract/PO. The Respondent's correction was deemed to lack a strong evidentiary basis as required by Article 29 paragraph (2) of the KUP Law.

Judicial Consideration: Supreme Court Precedent and Legal Consistency

This legal resolution was further strengthened by a Supreme Court Judicial Review Decision which had previously ruled on the same subject matter for Corporate Income Tax, ensuring legal consistency. Consequently, Taxpayers are assured that commercial agreements documented in formal papers mitigate the risk of unilateral market price corrections by tax authorities.

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