The Indian Comptroller and Auditor General (CAG) has highlighted a report indicating that Radico Khaitan Ltd. underpaid excise duty, totaling Rs 1,078.09 crore, along with associated taxes, to the Uttar Pradesh government.
Radico Khaitan, the producer of 8 PM whiskey and Magic Moments vodka, has come under scrutiny in a CAG report.
The report highlights that the assistant excise commissioner at Radico Khaitan Limited in Rampur failed to adequately oversee the matching of input excise material consumption as recorded in excise documents with the declarations made to the Income Tax Department.
This failure resulted in the company not identifying the understated consumption of input excise material, leading to a shortfall in excise revenue amounting to Rs 1,078.09 crore (inclusive of interest totaling Rs 482.34 crore) between the years 2013-14 and 2019-20.
The auditor reviewed records pertaining to molasses, grains, and barley malt utilized in the production of alcoholic beverages.
The auditor also contrasted the usage data of molasses, grain, and barley malt presented by the taxpayer in their official filings to the Income Tax Department (ITD) with the corresponding quantities recorded in the documents of the Assistant Excise Commissioner (AEC) at Radico Khaitan Limited in Rampur.
Discrepancies between the quantities stated in the records and the returns submitted to the income-tax department, in comparison to those held by the state excise department, were reportedly observed.
"The disparities identified in the consumed materials suggest that the taxpayer had misrepresented the consumption of input items in their excise records, resulting in a potential excise revenue loss of Rs 595.75 crore, with leviable interest amounting to Rs 482.34 crore," stated the CAG.
Radico Khaitan plays a role in generating approximately 30% of the state's excise revenue.
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