Trapped in FTZ Administration: Why Sellers Aren't Liable for VAT If Buyers Forget Endorsements?

PT TDASI VAT Dispute: Non-Collected Facilities on BKP Deliveries to Free Trade Zones

The dispute between PT TDASI and the tax authorities culminated in the classification of BKP deliveries to Free Trade Zones (FTZ), which should enjoy VAT-not-collected facilities under PMK-62/PMK.03/2012. The Respondent reclassified these as VAT-taxable deliveries, arguing that the Petitioner failed to produce original endorsement documents (PPFTZ-03) during the audit, an absolute requirement for utilizing fiscal facilities in FTZ territories.

The Core Conflict: Burden of Proof on Endorsement Documents and Administrative Responsibility

The core conflict centered on the burden of proof and administrative responsibility, with the Respondent insisting that the absence of physical endorsement evidence nullifies the facility right. Conversely, the Petitioner asserted that the documents were submitted during the audit and that the substance of the transaction to Batam was valid. The Board of Judges traced the facts through document loan records and found that the originals were indeed with the auditor, but more crucially, the Board emphasized that the regulatory obligation for endorsement lies with the buyer in the FTZ.

The Legal Resolution: Overturning Corrections Based on Material Substance and Responsibility Allocation

The legal resolution by the Board of Judges stated that administrative failures regarding endorsements, following the spirit of PMK-173/PMK.03/2021, should not be charged to the seller. Consequently, the Respondent's correction was overturned as the delivery materially occurred and supporting documents were available. In conclusion, legal certainty in FTZ facilities must prioritize transaction substance and correct allocation of administrative responsibility according to the prevailing laws.

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