The Excise Department granted liquor manufacturer W.M. Mendis & Co. Ltd. which had defaulted on excise duty amounting to more than Rs.1 billion permission to restart operations after reaching an agreement with the company to settle all of its tax arrears once it starts producing liquor in its distilleries.
Under the agreement, the company owned by Central Bank bond scam suspect Arjun Aloysius has agreed to settle the tax arrears in instalments. The company must also pay scheduled taxes every 15 days.
A senior Excise Department official said the company had made several requests to resume operations after having its licence suspended earlier for non-payment of taxes.
“The company pointed out that it could not pay the taxes that it defaulted on as all other avenues of revenue were shut. As such, an agreement was reached whereby it could resume operations on the condition that it makes scheduled payments due to the department,” the official said.
The Excise Department would continue to strictly monitor the company to ensure that the payments were made, but saw the agreement as the best option to recover outstanding tax revenue, the official stressed.
Last year, the Inland Revenue Department (IRD) unearthed a massive tax evasion of more than Rs. 6 billion by W.M. Mendis & Co. Ltd. The IRD found that the company had also defaulted Rs. 1.1 billion in excise duty inflicting a massive loss to the Excise Department.
Investigators found that the company had not paid necessary corporate income tax payment amounting to Rs. 2.63 billion and Value Added Tax amounting to Rs. 3.55 billion to IRD during the previous government and the IRD had taken legal action to recover these dues.
It was also revealed that the company had defaulted on the repayment of a loan of Rs. 5 billion from the People’s Bank, Rs.4 billion loan from the Bank of Ceylon and Rs. 800 million from the People’s Leasing Company. It also owes various institutions money amounting to more than Rs. 2 billion for the services provided.
(Source: The Sunday Times)