Excise and commercial tax departments caught in turf war

Hyderabad: A tug of war is brewing between the commercial tax and excise departments with both making conflicting claims about their systems being more fool-proof than the other. Apart from creating confusion, this has the potential to create disturbances in the functioning of distilleries and the liquor trade.

While the commercial tax department officials aver that instances of evasion of tax can be arrested by the use of way bills for transit of vehicles carrying liquor bottles, the excise department says that each bottle is labelled and can be tracked. This is infallible and a way bill is not necessary as a permit letter would suffice to ferry liquor.

The excise department is citing a government order issued in 2018, when Somesh Kumar was the Chief Secretary, which dispensed with the use of way bills for liquor bottles. Despite objections, the commercial tax department issued instructions for carrying of way bills when liquor bottles are transported from TSBCL (Telangana State Breweries Corporation Limited) to outlets.

Immediately after this, vehicles loaded without TSBCL e-way bills were stopped by commercial tax officials for two days. When the issue was taken up at the higher level by excise officials, the issue was resolved on payment of a nominal penalty for the lapse. The incident has, however, led to a grouse in the excise department that the commercial tax wing was entering their turf.

The grievance was compounded after inspections of breweries were carried out by commercial tax officials, who claimed that they had unearthed suppression of `100 crore tax by a single brewery. They also conducted an output efficiency audit to come to this conclusion.

The process involves comparison of the quantity of the raw material, water and electricity consumption to generate a unit of beer. This method is contested by the excise officials who claim that they are monitoring breweries round-the-clock and any leakage will point fingers at the functioning of the entire department.

The excise department relies on the metred value of output of the breweries.