New machine readable tags launchedThe Inland Revenue Department (IRD) has ordered manufacturers of alcoholic beverages and cigarettes to affix machine readable excise duty stickers on their products in a bid to boost tax compliance.
The Inland Revenue Department (IRD) has ordered manufacturers of alcoholic beverages and cigarettes to affix machine readable excise duty stickers on their products in a bid to boost tax compliance. On Sunday, the IRD launched an online system to distribute the stickers.
The government imposes excise duty on goods manufactured domestically. More than 100 products falling under 54 categories are subject to excise duty.
The excise on alcoholic beverages ranges from Rs28 to Rs1,003 per litre. Likewise, the government charges excise tax on cigarettes ranging from Rs374 to Rs2,055 per 1,000 units.
Narayan Prasad Bhandari, director of the excise tax division at the IRD, said the department had introduced machine readable stickers to prevent tax evasion by using counterfeit stickers or reusing old stickers.
According to him, the new stickers that come with added security features can be read only by using a special device.
Moreover, the new stickers cannot be removed without destroying them which prevents their reuse.
“The feature ensures that stickers cannot be peeled off and reused to evade tax, which was quite a common practice in the past,” Bhandari said.
The IRD maintains direct supervision of alcoholic beverages from the time they are produced to the time they are shipped to market.
However, a number of instances of manufacturers bribing IRD officials and using counterfeit stickers have been revealed.
Four years ago, the IRD took action against seven distilleries, namely Purbanchal Distillery, Trijuga Distillery, Annapurna Distillery, Dhanusha Distillery, Sarada Distillery, Rainbow Distillery and Dovan Distillery under the charge of using fake excise stickers.
Similarly, Shree Distillery was fined Rs870 million, and its proprietor Mathura Prasad Maskey was sentenced to six months in jail for evading excise duty.
Excise duty is also levied on cigarettes and other tobacco products.
Likewise, the government imposes 5 percent excise tax on plastic, iron rod, cement, wall paint, tile and other sanitary items. “However, very few cases of malpractice have been found with regard to these products.”
The IRD has started an online system to implement excise duty. Factory owners can apply online to receive excise duty stickers.
“Based on the application, the IRD allows Inland Revenue Offices to issue stickers to the factories,” said Rajendra Kumar Paudel, deputy director general of the IRD.
Paudel added that the online system would save time and money for both the
government and entrepreneurs. Earlier, factory owners had to wait for a week to receive the stickers. “With the new system in place, the IRD can also track sticker users more effectively,” Paudel said.