KATHMANDU, Dec 30: Unable to solve the issues related to the shortfall of excise duty stickers, the Inland Revenue Department (IRD) has stepped up preparations to revive a decade old flow meters system for beer manufacturers.
Once the system comes into effect, the brewers will have to fit flow meters in their production plants to ensure the amount of beer they manufacture and sell in the market. Based on the quantity and quality of the alcoholic beverage, the government will collect the amount in excise duty.
In the existing system, an excise duty sticker is pasted on each bottle/can of the alcoholic beverage. In the new system, a single sticker will be pasted in a carton of beer packages labeled with the details of the products packed inside. The government collects excise duty of Rs 165 per liter of beer.
Government Expands Excise Duty Coverage
Issuing a notice recently, the IRD has asked the beer companies to use the flow meters to ascertain their actual production volume in order to collect the excise duty. In 2013, the department had replaced the flow meters with expensive stickers to check the tax evasion.
The IRD is now planning to revive the old system to collect tax as it is reeling under a shortage of excise stickers for imported liquor and cigarettes after Perusahaan Umum Percetakan Uang Republik Indonesia (Perum Peruri), the Indonesian company selected to supply the stickers in March, didn’t show up to sign a contract with the department.
As a stop-gap measure, the department authorized the Janak Education Material Centre to print nearly 100 million pieces of stickers for cigarettes and chewing tobacco products. But as the country lacks a security printing press, international bidding was deemed necessary to discourage the possible counterfeiting of stickers in the market.
The IRD, however, faced a snag after the Supreme Court last month issued an interim order halting the procurement process through international bidding that the department had started last October. This has driven the IRD to bring the flow meters back to life.
The IRD has directed the brewers to fix flow meters only in the presence of the IRD officials. The brewers have been asked to follow the strict guidelines for the calibration process. The beer companies, however, will have to invest themselves to purchase the necessary devices.
