The Inland Revenue Department has levied a higher rate of excise duty on beer after finding that beer produced by Gorkha Brewery is short of standards.
The Inland Revenue Office, Nawalpur had written to the department to classify beer for excise duty after finding Gorkha to have used less than 50 percent of barley in its different brands of beer.
There is only one classification for beer under the Excise Duty Act and it requires beer to have 50 percent of barley.
The department has now classified beer into two categories—one with 50 percent of barley and another with less than 50 percent—and continued the existing excise duty rate for that with 50 percent, and levied the rate of other liquors with higher alcohol content on that with less than 50 percent.
The department has levied excise duty of Rs 465 per liter for beer with less than 50 percent barley. It is just Rs 165 per liter for that with 50 percent barley.
Deputy Director General of the department Shiva Devi Dahal said the department has already written to all 10 breweries about new classification.
This incident shows that breweries in Nepal may have been manufacturing beer violating standards for a long time despite monitoring by department staffers about the proportion of raw materials and produced units.
Gorkha had not sent its products to the market for a week after not meeting standards. It has now started to manufacture beer with 50 percent barley.
The department has already gathered details of the beer stock with less than 50 percent barley. Gorkha will have to pay Rs 465 per liter if it wishes to send the stock to the market.
Gorkha Brewery has been mired in controversies about tax evasion in recent times.
The Judicial Council had taken action against three High Court justices for overstepping the remit while hearing a case about Gorkha Brewery and issuing orders favoring the brewery. Two of them had resigned while one was fired.
