Radico Khaitan has become the latest distiller in India to be visited by tax officials amid an ongoing investigation into imports of bulk Scotch whisky.
In a stock-exchange filing yesterday (27 October), the 8PM Whisky maker said officials from the Directorate of Revenue Intelligence (DRI) visited its corporate headquarters in New Delhi and manufacturing site in Rampur, Uttar Pradesh.
The visits occurred on Monday (26 October), "under provisions of the Customs Act, 1962", the statement added.
Radico Khaitan said the inspections "form part of an industry-wide exercise being conducted by the revenue authority".
It added the enforcement action has led to “no impact on financial, operation or other activities” so far.
“The company has extended its full co-operation and assistance to DRI and will continue to provide cooperation as the matter progresses."
Days earlier, tax officials also carried out visits to domestic rival Allied Blenders and Distillers' Mumbai headquarters and Aurangabad plant.
The group said in a filing the visits were linked to “an industry-wide review” into the custom codes applied to bulk Scotch imports.
Authorities have also inspected facilities belonging to Pernod Ricard and Diageo subsidiary United Spirits this month to review the classification of some of their bulk Scotch imports.
A trade pact between the UK and India came into effect in July. Under the agreement, Indian tariffs on UK whisky exports were lowered from 150% to 75%, with duties scheduled to decline further to 40% across the next ten years.
The International Spirits and Wines Association of India (ISWAI) has reportedly written to the country's commerce minister on the issue.
According to a letter, seen by Reuters but not by Just Drinks, the ISWAI said the classification matter “risks undermining, in practice, an important market-access benefit negotiated and agreed between India and the UK”.
In a separate stock exchange filing, Radico Khaitan also reported its results for the quarter ended 30 September.
The group booked a 66.1% year-on-year increase in consolidated net profit to Rs2.32bn ($24.39m) for the quarter ended 30 September.
Revenue from operations for the three-month period rose 10.4% from the prior year to Rs55.8bn.
