VAT Already Paid to the State but Still Collected? Lessons from the PT DR Joint Operation Dispute Case

Dilemma Between Formal Compliance and Substantive Justice in KSO Schemes

The Indonesian taxation landscape is once again confronted with a dilemma between formal compliance and substantive justice in the case of goods/services delivery through Joint Operation (KSO) schemes. The core of this conflict began when PT DR reported Penyerahan (deliveries) to PT P using tax invoice code 030 (Collector). However, the Tax Authority (DJP) performed a correction by reclassifying these transactions as deliveries to the KSO entity, which should have utilized tax invoice code 010. The DJP argued that because the contracts were signed in the name of the KSO, the KSO is legally the tax subject performing the delivery; thus, KSO members are obligated to issue invoices to the KSO entity first.

Taxpayer Rebuttal and the Panel of Judges' Resolution

Conversely, PT DR provided a strong rebuttal, asserting that the KSO was merely non-administrative or acted solely as a coordination tool. Factually, all resources, billing, and the receipt of payments were handled directly by each individual member. Most crucially, PT P had already collected the VAT and remitted it to the state treasury via SSP (Tax Payment Slip) mentioning PT DR’s NPWP (Taxpayer Identification Number). In its resolution, the Panel of Judges acknowledged the presence of formal non-compliance but sharply highlighted that the state suffered no loss because the taxes had already entered the state treasury. Requiring PT DR to pay the same VAT again (double taxation) while the right to claim a refund for mispaid taxes had expired (exceeding 5 years) was considered an action that violates the sense of justice.

Decision Analysis and Implications

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