- Excise Dept. holds firm; sets strict deadline
- Agreements in place with defaulters, no tolerance for future defaults: Dept.
- NAO report reveals rising arrears
The Excise Department has informed W.M. Mendis and Co. – one of the oldest liquor manufacturers in the country – to settle its excise tax arrears of around Rs. 1.2 billion owed for 2023 by 30 November.
Speaking to The Sunday Morning Business, Excise Commissioner General M.J. Gunasiri revealed that the department had reached an agreement with W.M. Mendis and Co. under which the liquor manufacturer would complete the settlement of excise tax arrears of Rs. 1.2 billion owed for 2023 by 30 November by settling two instalments per month.
He further revealed that no leeway would be granted to the liquor manufacturer going forward to default on its current and/or future taxes.
“We have informed them that they cannot default on their current taxes and accordingly, they have not defaulted on their current taxes since January. The 2023 tax arrears will be paid off by paying two instalments per month in terms of the agreement reached,” Gunasiri said.
He revealed that they were currently not pursuing the excise taxes owed by W.M. Mendis and Co. for the period during which the liquor manufacturer had ceased operations in the aftermath of the bond scam, noting that they were awaiting the court’s verdict on the matter.
He further noted that four liquor manufacturers including W.M. Mendis and Co. had defaulted on their excise taxes due for 2023 and that the Excise Department had entered into similar agreements with them as well.
According to the National Audit Office (NAO) report for 2022 (the latest available), the Excise Department should have received approximately Rs. 5.51 billion in arrears of duties and delay charges from liquor manufacturing companies, toddy manufactories, and distilleries.
The observed increase in arrears is Rs. 964.21 million, representing a 21.18% rise compared to the arrears of revenue as of 31 December 2021.
Furthermore, the NAO stated that Rs. 497.34 million had been collected by 15 May 2023 as arrears of duties and surcharges from the amount that should have been collected.
The outstanding duty amount of Rs. 7.24 million, which should have been collected as of 31 December 2022 from toddy manufacturers along with the corresponding surcharge, had been collected. Additionally, Rs. 1.99 million had been collected from the due amount of Rs. 16.57 million from the distilleries.