Excise probe into Bausch & Lomb

New Delhi, March 29: The excise department has launched an investigation into alleged excise duty avoidance by Bausch & Lomb (India) Ltd...

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New Delhi, March 29: The excise department has launched an investigation into alleged excise duty avoidance by Bausch & Lomb (India) Ltd. According to sources in the department, the company has been claiming 12 per cent additional discount, besides 20 per cent margin on the maximum retail price on the premise that it will be passed on to the dealers of its popular Ray Ban brand of sunglasses.

However, the company has not been passing on the full 12 per cent discount to the dealers. Discounts were being provided at various rates depending on the dealer, sources added. Besides the margin and the additional discounts, the company has been claiming over eight per cent concessions as freight duty, octroi and sales tax, said sources. Sources said the department has already recovered about Rs 19 lakh from the company as excise duty.

Investigations are continuing and more duty is expected to be recovered, they added.

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In Bausch & Lomb’s case, the gap between assessable value and the MRP is more than 40 percent. There should be a provision for fixing MRP-based excise on sunglasses as the gap between the assessable value and the MRP is quite high, said sources. Department sources were of the opinion that eight per cent excise duty on sunglasses is less considering the fact that sunglasses are highly priced items. The issue of fixing MRP-based excise duty has been a bone of contention between the government and the industry. The revenue department has been advocating MRP-fixed excise for various products after it found that manufacturers were understating the value of their products for excise purposes, said sources.

Bausch & Lomb, which is engaged in the eye-wear and vision-care business, controls over 50 per cent of the Rs 70-odd crore organised sunglasses market in India.