New Delhi (Agency): The Comptroller and Auditor General (CAG) of India has highlighted an underpayment of excise duty amounting to Rs 1,078.09 crore, including interest, by Radico Khaitan Ltd to the Uttar Pradesh government. The findings were revealed in a CAG report that scrutinized records from the period 2013-14 to 2019-20.
Radico Khaitan is known as the manufacturer of popular alcoholic beverages like 8 PM whiskey and Magic Moments vodka. The company contributes about 30% of the excise revenue of Uttar Pradesh.
According to the CAG report, “the 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 (ITD) resulted in not detecting understatement of consumption of input excise material involving excise revenue of Rs 1,078.09 crore (including interest of Rs 482.34 crore) during the period 2013-14 to 2019-20.”
The audit examined the records related to the use of molasses, grain, and barley malt in the manufacture of liquor. It compared the consumption figures submitted by Radico Khaitan through statutory returns to the ITD with the quantities shown in the records of the Assistant Excise Commissioner (AEC), Radico Khaitan Limited, Rampur.
The CAG reportedly noticed variations in the quantities disclosed in the records and returns submitted to the income tax department, compared to those available with the state excise department. The report stated, “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 Rs 595.75 crore on which interest of Rs 482.34 crore was leviable.”
This discovery by the CAG raises concerns over the accuracy and transparency of excise duty payments by corporations. It may lead to further scrutiny and possible legal actions against Radico Khaitan and others involved in similar discrepancies.