Tax Evasion of Rs.1,078 Crore by Liquor Company detected: CAG Report

The Comptroller and Auditor General of India (CAG) has detected an evasion of excise duty by famous liquor manufacturing company Radico Khaitan Ltd, resulting in a loss to the state exchequer of Rs.1,078 crore, including interest, between 2013-14 and 2019-20.

The report, which was recently introduced in the UP assembly, blamed the alleged evasion on the assistant excise commissioner of Rampur, where the firm is situated. While top executives from the firm deputed at the Rampur distillery declined to comment on the subject, excise department officials say they will explain their side to the government and fight the CAG’s charges.

According to the CAG’s Compliance Audit Report, “the assistant excise commissioner, Rampur, failed to monitor the consumption of input excise material shown in excise records vis-a-vis returns filed in Income Tax Department, resulting in not detecting understatement of consumption of input excise material.”

The CAG determined that the underreporting resulted in losses to the exchequer of Rs.596 crore, while an additional sum of Rs.482 crore could not be collected as interest over the accumulated amount during the six-year period.

A senior state government official stated that a response to the CAG’s observations will be provided to the legislature.

“The department uses a unique methodology and approach that must be understood. The government will explain the entire procedure to the state assembly’s public accounts committee (PAC),” stated the official.