CUSTOMS REQUIREMENTS THAT MUST BE FULFILLED FOR IMPORTING ELECTRONIC CIGARETTES

International trade, or foreign trade, is the trade that includes export and/or import activities of goods and/or the trade of services surpasses the national borders1. This activity is one of the factors that supports the running of the economy and fulfills the society needs. In the implementation process, special rules and policies are needed which must be adhered to by the relevant parties so that trade relations between one country and another country performing seamlessly and have a beneficial impact on the national income. In Indonesia, international trade is generally regulated by Law Number 7 of 2014 on Trade, which was most recently amended by Law Number 6 of 2023 on Job Creation and the implementing regulations thereunder.

Import is one of the international trade activities that help countries obtain goods and/or services that are not available or are limited in quantity domestically. To undergo the import, there are various requirements that need to be fulfilled by an importer. One of them is that if an importer intends to import goods with special characteristics, then these goods can be subject to Excise Duty as regulated in the laws and regulations. The characteristics or nature of goods subject to Excise Duty are regulated in Article 2 paragraph (1) of Law Number 39 of 2007 on Amendments to Law Number 11 of 1995 on Excise as last amended by Law Number 7 of 2021 on Harmonization of Tax Regulations (“Excise Law”). The characteristics of these imported goods are in the event that:

  1. the circulation needs to be monitored;
  2. the usage may have negative effects on the environment and society;
  3. the usage requires the imposition of state levies for the sake of justice and balance; and
  4. the consumption needs to be controlled. 

The goods with these characteristics are called Excisable Goods/Barang Kena Cukai (”BKC”), hence people who intend to import goods that have these characteristics must pay the Excise Tariff. Pursuant to Article 4 of the Excise Law, one of the Excisable Goods or BKC is tobacco products, which include cigarettes, cigars, leaf cigarettes, sliced tobacco, and other tobacco processing products, regardless of whether substitute or auxiliary materials are used in their manufacture2.

Electronic cigarettes have garnered significant attention in Indonesia, particularly within the realm of tobacco products. Since the appearance of electronic cigarettes on the Indonesian market, a considerable number of traditional cigarette consumers have transitioned to the use of electronic cigarettes. According to the Central Statistics Agency/Badan Pusat Statistik report quoted on the databox page3 in March 2022, at least around 2.76% of the Indonesian population aged 5 years and over, usually consume e-cigarettes every day. Electronic cigarettes is the tobacco products available in various forms, such as liquid and solid, derived from processed tobacco leaves which are consumed by heating them with an electronic device and subsequently inhaling the resulting vapor4.  Pursuant to Minister of Finance Regulation Number 192/PMK.010/2022 on Amendments to Minister of Finance Regulation Number 193/PMK.010/2021 on Excise Tariffs for Tobacco Products in the Form of Electronic Cigarettes and Other Tobacco Processing Products, electronic cigarettes are divided into 3 (three) categories namely: solid e-cigarettes, open system liquid e-cigarettes, and closed system liquid e-cigarettes5. The large consumer interest in e-cigarettes has piqued the interest of industry professionals, particularly those within the domestic business sector, who are keen to closely examine the e-cigarette industry. A potential business strategy for domestic entrepreneurs seeking involvement in this industry involves forming international partnerships with e-cigarette manufacturers abroad, facilitating the importation and distribution of these products within the Indonesian market.

Including e-cigarettes into the BKC category entails a distinct set of permitting requirements for business practitioners, differing from those applicable to products not subject to Excise Duty. In this article, the author will specifically review 3 (three) important requirements in the customs sector that need to be fulfilled by business practitioners to import e-cigarettes. The customs requirements below do not exclude other requirements that are commonly possessed by business practitioners doing business in Indonesia, such as the obligation to have a Business Identification Number, Taxpayer Identification Number, etc.

  1. Entrepreneur Identification Number for Excisable Goods/Nomor Pokok Pengusaha Barang Kena Cukai (“NPPBKC”) 

As stipulated in Article 2 paragraph (1) letter c of Minister of Finance Regulation Number 66/PMK.04/2018 of 2018 on Procedures for Granting, Suspending and Revoking Entrepreneur Identification Number for Excisable Goods as amended by Minister of Finance Regulation Number 68 of 2023 2023 on Amendments to Minister of Finance Regulation Number 66/ PMK.04/2018 on Procedures for Granting, Suspending and Revoking Entrepreneur Identification Number for Excisable Goods, Importers of Excisable Goods (“MOF No.68/2023“) which mandates that BKC importers must have an Entrepreneur Identification Number for Excisable Goods/ Nomor Pokok Pengusaha Barang Kena Cukai (“NPPBKC”). NPPBKC will be used as a permit to carry out BKC import activities in casu electronic cigarettes. An application to obtain an NPPBKC is submitted to the Head of Customs and Excise Service Office which supervises the location, building or business premises that will be used as the Importer’s business premises. Before the Head of Directorate General of Customs and Excise Office grants approval or rejection of the NPPBKC application, the Official of Directorate General of Customs and Excise Office will first assess and examine the Importer business permit documents submitted by the Importer of Excisable Goods to the Ministry of Finance Attn. to the Head of Customs and Excise Office as required documents for the issuance of NPPBKC6, location of the business premises of the Importer of Excisable Goods 7, as well as conducting research and assessment of the business processes presented by the Company8

  1. Determination of Excise Tariffs

Under Article 7 paragraph (1) of Regulation of the Director General of Customs and Excise Number PER-17/BC/2022 on Procedures for Determination of Excise Tariffs for Tobacco Products in the Form of E-Cigarettes (“DGCE Reg No. PER-17/BC/2022“), prior to producing or importing e-cigarettes, the importer must obtain a determination of excise tariffs for tobacco products from the Head of Main Customs and Excise Service Office. The determination of Excise Tariff is granted upon request of the Importer which can be applied in the form of electronic data through the Application System of the Directorate General of Customs and Excise, or via written form submitted to the supervising Official of Customs and Excise Office9. The application is submitted by enclosing:

  1. A duty stamped statement stating that imported e-cigarette products do not contain narcotic or psychotropic substances, and that the product packaging used meets the requirements for packaging excisable goods10.
  2. Test results regarding the weight or volume contained in electronic cigarettes from the laboratory of the Directorate General of Customs and Excise or other agencies/institutions that have received accreditation from the National Accreditation Committee/Komite Akreditasi Nasional (KAN)11.

During the determination of Excise Tariffs, the Importer will receive a Tobacco Product Brand/Merek Hasil Tembakau, namely product identity in the form of letters and/or numbers containing the Importer’s identity and other information related to excise and other levies12, which includes details of the amount of excise tariff, retail selling price, packaging contents, marketing purposes, physical form of excise stamps13, as well as the weight/volume per package of solid tobacco contained in solid e-cigarette sticks or capsules; or the liquid contained in a liquid e-cigarette cartridge in a closed package14.  

  1. Excise Stamps

Pursuant to Article 1 paragraph 9 of Regulation of the Director General of Customs and Excise Number Per-45/BC/2016 on the Provision and Ordering of Excise Stamps, Excise Stamps are security documents used as a sign of payment of excise duty in the form of paper which has the characteristics/elements of security with specifications and particular design. After obtaining NPPBKC and Tobacco Product Brand, the Importer can submit an Application for Providing Tobacco Product Excise Stamps/Permohonan Penyediaan Pita Cukai Hasil Tembakau (P3C HT), and an Application for Ordering Tobacco Product Excise Stamps/Permohonan Pemesanan Pita Cukai Hasil Tembakau (CK-1) at the Customs and Excise Head Office. The application can only be submitted by the Importer in the event that:

  1. NPPBKC owned is not suspended;
  2. The Importer does not have excise debts that are not paid on time, outstanding excise, and/or administrative sanctions in the form of fines that have not been paid by the due date;
  3. The Importer has paid the replacement costs for providing Excise Stamps within the stipulated time; and
  4. There are no alleged criminal offences in the excise sector based on recommendations from one of the work units handling supervision within the Directorate General of Customs and Excise15.

Applications can be submitted in the form of electronic data or via written form submitted directly to the Customs and Excise Head Office.
If a BKC Importer is found to be selling e-cigarettes that are not attached with excise stamps, then the Importer may be subject to criminal sanctions with imprisonment for a minimum of 1 (one) year and a maximum of 5 (five) years and/or a fine of at least 2 (two) times the excise value and a maximum of 10 (ten) times the excise value that should be paid16.


  1.  Article 1 point 3 Law Number 7 of 2014 on Trade
  2.  Article 4 paragraph (1) item c of Law Number 39 of 2007 on Amendments to Law Number 11 of 1995 on Excise as most recently amended by Law Number 7 of 2021 on Harmonization of Tax Regulations
  3. https://databoks.katadata.co.id/datapublish/2022/11/28/10-provinsi-dengan-konsumen-rokok-elektrik-terbesar
  4.  Elucidation of Article 14 item c of Law Number 7 of 2021 on Harmonization of Tax Regulations (“Law No.7/2021”),
  5.  Under Minister of Finance Regulation Number 192/PMK.010/2022 on Amendments to Minister of Finance Regulation Number PMK.010/2021 on Excise Tariffs for Tobacco Products in the Form of E-Cigarettes and Other Tobacco Processing Products. 
  6.  Article 6 of Regulation of the Minister of Finance of the Republic of Indonesia Number 68 of 2023 on Amendments to Minister of Finance Regulation Number 66/PMK.04/2018 on Procedures for Granting, Suspending and Revoking Entrepreneur Identification Number for Excisable Goods, Importers of Excisable Goods
  7.  Article 9 of Minister of Finance Regulation Number 68 of 2023 on Amendments to Minister of Finance Regulation Number 66/PMK.04/2018 on Procedures for Granting, Suspending and Revoking Entrepreneur Identification Number for Excisable Goods, Importers of Excisable Goods
  8.  Article 19 paragraph 2 of Minister of Finance Regulation Number 68 of 2023 on Amendments to Minister of Finance Regulation Number 66/PMK.04/2018 on Procedures for Granting, Suspending and Revoking Entrepreneur Identification Number for Excise Goods
  9.  Article 7 paragraph 6 of Regulation of the Director General of Customs and Excise Number PER-17/BC/2022 on Procedures for Determining Excise Tariffs for Tobacco Products in the Form of Electric Cigarettes
  10.  Article 7 paragraph 4 of Regulation of the Director General of Customs and Excise Number PER-17/BC/2022 on Procedures for Determining Excise Tariffs for Tobacco Products in the Form of Electric Cigarettes
  11.  Article 7 paragraph 5 of Regulation of the Director General of Customs and Excise Number PER-17/BC/2022 on Procedures for Determining Excise Tariffs for Tobacco Products in the Form of Electric Cigarettes 
  12.  Article 9 paragraph 2 of Regulation of the Director General of Customs and Excise Number PER-17/BC/2022 on Procedures for Determining Excise Tariffs for Tobacco Products in the Form of Electric Cigarettes
  13.  Article 9 paragraph 3 of Regulation of the Director General of Customs and Excise Number PER-17/BC/2022 on Procedures for Determining Excise Tariffs for Tobacco Products in the Form of Electric Cigarettes
  14.  Article 9 paragraph 4 of Regulation of the Director General of Customs and Excise Number PER-17/BC/2022 on Procedures for Determining Excise Tariffs for Tobacco Products in the Form of Electric Cigarettes
  15.  Article 3 of Regulation of the Director General of Customs and Excise Number PER-45/BC/2016 on the Provision and Ordering of Excise Stamps.
  16.  Article 54 of Law Number 39 of 2007 on Amendments to Law Number 11 of 1995 on Excise as lastly amended by Law Number 7 of 2021 on Harmonization of Tax Regulations

Author:

Ruth Arthasya Angelica

Ruth Arthasya Angelica

Junior Associate

Dina Amini

Dina Amini

Junior Associate

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Picture of Ruth Arthasya Angelica
Ruth Arthasya Angelica
Junior Associate

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