Excise Refunds through Reprocessing or Destruction of Excisable Goods under Regulation of the Director General of Customs and Excise Number PER-2/BC/2026

Introduction 

On April 16, 2026, the Director General of Customs and Excise (Direktur Jenderal Bea dan Cukai, “DJBC”) issued the Regulation of the Director General of Customs and Excise Number PER-2/BC/2026 on the Reprocessing or Destruction of Excisable Goods Manufactured in Indonesia to Support the Refund of Excise (“DJBC Regulation 2/2026”). DJBC Regulation 2/2026 regulates the mechanism for Factory Entrepreneurs (Pengusaha Pabrik) to reprocess or destroy excisable goods (barang kena cukai) as the basis for the refund of settled excise. 

DJBC Regulation 2/2026 replaces the previous provisions and adjusts the implementation of the reprocessing or destruction of excisable goods to support excise refunds, as well as supervision and services in the excise sector.  The implementation of reprocessing or destruction takes into account the need for physical and administrative verification as well as the use of electronic systems in the excise refund process. 

Comparison 

DJBC Regulation 2/2026 repeals the provisions of the Regulation of the Director General of Customs and Excise Number PER-34/BC/2013 on the Reprocessing or Destruction of Excisable Goods Manufactured in Indonesia to Support the Refund of Excise (“DJBC Regulation 34/2013”) as amended by the Regulation of the Director General of Customs and Excise Number PER-28/BC/2019 (“DJBC Regulation 28/2019”).  The following is the comparison between DJBC Regulation 2/2026 and DJBC Regulation 34/2013 and DJBC Regulation 28/2019: 

Key Provisions 

Criteria for Recipients and Objects of Excise Refunds 

Excise refunds are granted to Factory Entrepreneurs for Indonesian-manufactured excisable goods for which the excise has been settled.  Article 2 applies to excisable goods with settlement through the attachment of excise stamps (pita cukai) as well as payment.  Factory Entrepreneurs submit refunds for ordered excise stamps or paid excise in the current fiscal year and/or the previous fiscal year. 

Technical Methods of Reprocessing and Destruction 

Article 3 mandates the implementation of reprocessing of excisable goods within the premises of the Factory.  Article 3 also permits the destruction of excisable goods inside or outside the Factory.  The destruction of excisable goods is conducted through the following methods: 

1. Burning all excisable goods; 

2. Physically destroying the excisable goods; or 

3. Burying the excisable goods in a dug hole filled with water and soil. 

Notification Mechanism and Deadline of PBCK-3 

Factory Entrepreneurs submit the PBCK-3 document to the Head of the Office overseeing the Factory via an electronic system.  Article 4 paragraph (2) mandates the submission of such document no later than July 1 of the following year after the fiscal year of excise settlement.  Factory Entrepreneurs submit the PBCK-3 separately based on the method of excise settlement (excise stamp or payment) and the type of activity. 

Obligations for Physical Preparation and Grouping of Goods 

Factory Entrepreneurs conduct physical preparation prior to examination. Article 4 paragraph (6) stipulates the preparation steps as follows: 

1. Providing the site, operational personnel, and security facilities; 

2. Removing the excisable goods from the outermost packaging; 

3. Grouping the goods based on brand, settlement year, series, retail selling price, tariff, and content; and 

4. Storing the goods submitted for refund in a separate place from other goods inside the Factory. 

Formation and Duties of the Supervisory Team 

The Head of the Customs and Excise Office overseeing the Factory shall form a Supervisory Team no later than 5 working days after the issuance of the activity approval letter. The Supervisory Team consists of at least 2 (two) Customs and Excise Officials. The Supervisory Team examines the goods and supervises the implementation of reprocessing or destruction on-site. 

Endpoint of Supervision and Daily Documentation 

Article 6 establishes the endpoint of supervision. The supervision is deemed completed when: 

1. For reprocessing activities in the Factory: all excisable goods have been removed from the retail packaging (and all excise stamps have been completely destroyed, specifically for settlement through the attachment of excise stamps); or 

2. For destruction activities: the excisable goods have lost their main nature or characteristics so that they can no longer be used or consumed (and all excise stamps have been destroyed, specifically for settlement through the attachment of excise stamps). 

The Supervisory Team records the examination results in the Daily Working Paper (Kertas Kerja Harian, “KKH”) and the Minutes (Berita Acara, “BACK-3”). 

Basis for Excise Refund and Claim Period 

The excise refund is based on the underlying documents in the form of Proof of Destruction of Excise Stamps (Tanda Bukti Perusakan Pita Cukai) (CK-2) or the Minutes (BACK-3). Article 9 requires that the excise deposit has been recorded in the state treasury. Factory Entrepreneurs submit the refund application within a maximum period of 10 (ten) years from the issuance of the underlying document. 

Replacement Costs for Excise Stamps and Utilization of Funds 

Factory Entrepreneurs pay the replacement costs for excise stamps that have been destroyed.  Article 8 paragraph (2) mandates the payment of such costs prior to the use of the CK-2 document.  Factory Entrepreneurs utilize the refund funds through the following mechanisms: 

1. Offsetting it against excise debt; 

2. Using it for the subsequent excise settlement (compensation) if they do not have any debt; or 

3. Receiving the refund in cash. 

Utilization of the Service Computer System 

Article 10 mandates the implementation of reprocessing or destruction through the Service Computer System. Factory Entrepreneurs may use written forms or digital copies under the following conditions: 

1. The facilities on the Service Computer System are not yet available; or 

2. The Service Computer System experiences technical disruptions. 

Technical Procedures for Settlement with Excise Stamps 

DJBC Regulation 2/2026 sets out the technical procedures based on the activity location for excisable goods utilizing excise stamps: 

1. Activities Inside the Factory: Article 11 stipulates that Factory Entrepreneurs conduct activities a maximum of 2 (two) times in 1 (one) month. Factory Entrepreneurs introduce excisable goods from free circulation utilizing the CK-5 document. 

2. Destruction Outside the Factory with Preliminary Examination: Article 12 stipulates that Factory Entrepreneurs conduct activities a maximum of 4 (four) times in 1 (one) fiscal year. Customs and Excise Officers escort the goods from the Factory to the destruction site. 

3. Direct Destruction Outside the Factory: Article 13 stipulates that Factory Entrepreneurs conduct activities for an excise value of up to Rp100,000,000.00 (one hundred million rupiah) and a maximum of 2 (two) times in 1 (one) fiscal year. 

Technical Procedures for Settlement with Payment 

DJBC Regulation 2/2026 sets forth the limitations on the frequency and locations of activities for excisable goods settled via payment as follows: 

1. Activities Inside the Factory: Article 14 stipulates that Factory Entrepreneurs conduct activities a maximum of 2 (two) times in 1 (one) fiscal year. 

2. Destruction Outside the Factory with Preliminary Examination: Article 15 stipulates that Factory Entrepreneurs conduct activities a maximum of 2 (two) times in 1 (one) fiscal year.  Customs and Excise Officers provide escort during the implementation of activities. 

3. Direct Destruction Outside the Factory: Article 16 stipulates that Factory Entrepreneurs conduct activities for an excise value of up to Rp100,000,000.00 (one hundred million rupiah) and a maximum of 2 (two) times in 1 (one) fiscal year. 
   

Closing

DJBC Regulation 2/2026 governs the implementation of the reprocessing or destruction of excisable goods as the basis for excise refunds through a Service Computer System-based mechanism, including document submission, examination, supervision, and the stipulation of results. Factory Entrepreneurs implement the activities by complying with the frequency limitations, including a maximum of 2 (two) times in 1 (one) month for activities inside the factory, as well as an excise value limit of up to Rp100,000,000.00 (one hundred million rupiah) for direct destruction outside the factory, while fulfilling administrative obligations in the form of submitting the PBCK-3 document no later than July 1 of the following year after the fiscal year of settlement, preparing and grouping goods separately prior to examination, as well as paying the replacement costs for excise stamps prior to the use of the CK-2 document.  The implementation of activities involves the formation of a Supervisory Team that conducts on-site examination and supervision, with the examination results recorded in the Daily Working Paper and the Minutes as the underlying documents for excise refunds, provided that the excise deposit has been recorded in the state treasury and the refund is submitted within a maximum period of 10 (ten) years from the issuance of the underlying documents. The excise refund value is first offset against excise debt, and if there is no debt, it may be used for the subsequent settlement or refunded in cash.