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Reopening Wayamba Distilleries: MP allowed to repay in instalments

29 Nov 2020

By Madhusha Thavapalakumar A prominent minister has been reissued with the license to operate Wayamba Distilleries (Pvt.) Ltd. in Kurunegala, in which he has a majority stake, after agreeing to settle outstanding tax payments on an instalment basis to the Department of Excise, The Sunday Morning Business learns.  Wayamba Distilleries was sealed by the Police on 19 January 2015 reportedly due to skipping tax payments and operating storage facilities without a proper license. Its license for liquor manufacturing too was cancelled subsequently. When contacted, Commissioner General of Excise A. Bodaragama refused to divulge the name of the owners of the company, but told us that the distillery has a Board of Directors. However, the company does not have a website and therefore the details of the board members are not in the public domain, including on the Excise Department’s website. Bodaragama stated that the distillery has made a part payment of their outstanding taxes recently and has obtained their license to manufacture as the Department of Excise, Treasury, and the distillery has worked out a plan where the rest of the outstanding tax payments will be paid in equal instalments. Bodaragama refused to divulge the amount paid by the distillery. “We have legally permitted Wayamba Distilleries to resume operations. This instalment structure was planned and approved by the Ministry of Finance Secretary,” he added.  Bodaragama stated that as the Department of Excise was taxing Wayamba Distilleries even during their shutdown period, the company had sent the Department a Letter of Demand (LOD) seeking Rs. 8 billion compensation and this is the reason why the Department chose to go for an instalment payment structure to secure the distillery's outstanding tax payments.  When asked the total sum of the outstanding taxes of the company, Bodaragama stated that the Department of Excise is “yet to calculate Wayamba Distilleries’ taxes with surcharges”.  However, according to the performance report of the Department of Excise for the year 2013, as of 31 December 2013, Wayamba Distilleries' outstanding payments to the Department stood at Rs. 243.57 million out of which Rs. 119.3 million was arrears tax.  Speaking further, Bodaragama noted that Wayamba Distilleries had never been forbidden from operating and they were closed down in 2015 only due to political issues. He added that as manufacturing was suspended, the distillery did not have the financial capacity to settle excise taxes.  All our attempts to contact the prominent minister proved futile. The performance report of the Department of Excise for the year 2013 noted that: “In case of Globe Blenders, Wayamba Distilleries Company and Wayamba Wholesale Store, agreements were signed under support and supervision of Attorney General’s Department in order to collect the tax arrears from these organisations. According to such agreements Rs. 157.45 million has been charged as the income arrears in Excise Tax during 2013.” According to the performance report of the Department of Excise for the year 2014, Wayamba Distilleries had produced 1,212.7 litres of molasses arrack that year, for which the Excise Duty stood at Rs. 1.4 million, and 100,836 litres of special arrack, for which an Excise Duty of Rs. 120.8 million was imposed. In 2015, the distillery produced 1,808.4 litres of special arrack, for which an Excise Duty of Rs. 2.8 million was imposed.  


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