The Comptroller & Auditor General (CAG) of India has brought attention to an instance of Radico Khaitan Ltd, the producer of 8 PM whisky and Magic Moments vodka, underpaying excise duty and taxes amounting to INR 1,078.09 crore to the Uttar Pradesh government.
“Assistant Excise Commissioner, Radico Khaitan Limited, Rampur failed to monitor consumption of input excise material shown in excise records vis-a-vis returns filed in Income Tax Department resulted in not detecting understatement of consumption of input excise material involving excise revenue of INR 1,078.09 crore (including interest of INR 482.34 crore) during the period 2013-14 to 2019-20,” CAG has said in the report.
The audit reviewed the records related to diverse materials like molasses, grain, and barley malt, which are utilized in the production of liquor.
The audit conducted a comparison between the consumption data of molasses, grain, and barley malt as reported by the taxpayer through legally required filings to the Income Tax Department (ITD) and the corresponding quantities documented in the records of the Assistant Excise Commissioner (AEC) at Radico Khaitan Limited in Rampur. Discrepancies were observed between the quantities declared in the records and returns submitted to the Income Tax Department and those recorded in the State Excise Department.
“The variations found in the consumed material indicate that the assessee had understated the consumption of inputs items in excise records, involving excise revenue of INR 595.75 crore on which interest of INR 482.34 crore was leviable,” CAG has said.
Radico Khaitan accounts for approximately 30% of the state’s excise revenue. Over the past 3-4 years, the excise revenue in the state has experienced a twofold increase.
In a regulatory submission on Tuesday, Radico Khaitan has stated its adherence to all legal obligations, encompassing the revenue laws of the nation.
“We have not received any notice of any irregularity in the matter,” the company has said.