The obligation of a Taxable Entrepreneur (Pengusaha Kena Pajak - PKP) to collect Value Added Tax (VAT) on the delivery of Taxable Goods (BKP) or Taxable Services (JKP) is an imperative mandate under Article 3A paragraph (1) of the Indonesian VAT Law. This imperative principle was tested in Tax Court Decision Number PUT-010640.99/2024/PP/M.XVIIA Tahun 2025, which rejected the lawsuit filed by CV BMI regarding the correction of the VAT Tax Base (DPP). The case originated from the Directorate General of Taxes' (DJP) finding of sales turnover reported in the Corporate Income Tax (CIT) Annual Tax Return that was not matched with the collection of Output VAT, subsequently leading to the issuance of an Underpaid Tax Assessment Letter (SKPKB).

The Core Conflict: Procedural UP2HP Delivery vs Buyer Refusal to Pay VAT

The core conflict in this dispute revolves around two aspects: formal and material. On the formal side, the Plaintiff argued that the SKPKB was legally flawed due to examination procedures that violated the principle of transparency, specifically concerning the delay and method of sending the Final Examination Discussion Invitation (UP2HP) via post. The Plaintiff contended that the resulting unilateral issuance of the SKPKB due to non-attendance infringed upon the Taxpayer's right to be heard. Substantively, the Plaintiff challenged the VAT DPP correction based on a business reality: the refusal of buyers in the field to be charged VAT, which forced the Plaintiff not to collect VAT in order to maintain business competitiveness.

Judicial Resolution: Discretionary Postal Delivery and Statutory Basis for VAT Collection

The legal resolution provided by the Tax Court Panel was definitive, rejecting all of the Plaintiff's claims. Regarding the procedure, the Panel deemed the delivery of the invitation via post as valid, based on the discretionary authority implied by the word 'dapat' (may/can) in Article 43 paragraph (5) of PMK 184/PMK.03/2015. Thus, technical administrative errors or delayed receipt not caused by DJP’s absolute negligence do not invalidate the SKPKB's legality. The crucial point lies in the material aspect: the Panel explicitly stated that the obligation to collect VAT is a legal consequence of the PKP status, which cannot be overridden by non-legal factors such as buyer refusal or business competition. The correction of the VAT DPP by the DJP, based on the reconciliation with the CIT sales turnover where no VAT was collected, was deemed legally sound and aligned with proper tax principles.

Business Implications and Mandatory Compliance Principles for Taxable Entrepreneurs

The implication of this Decision is profound for the business world: once a company chooses to be a PKP, there is no room for negotiation or exemption from the obligation to collect VAT, even if it risks disrupting the business model or losing customers. This Decision reinforces the fiscal authority's position that the VAT DPP is legally due on the turnover recognized by the Taxpayer, and the risk of non-compliance (non-collection) is entirely borne by the PKP. The Taxpayer's future strategy must ensure that Output VAT and CIT sales turnover are always reconciled, and the VAT component is structurally included in the initial selling price.

Conclusion: This Decision serves as an important jurisprudence affirming that VAT compliance is mandatory. Non-essential procedural arguments and business competition claims are not strong enough to nullify a substantively due VAT assessment.

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