According to central excise field formations, the manufacturers of paan parag are believed to be among the largest excise duty evaders till date mainly because they used to declare the excisable value of the commodity at a much lower rate than the one printed on its packing.

The difference between the excisable cost and the MRP allowed them to show their actual clearance price at much lower than the actual on which the duty was paid which in reality was nothing but a method of evading duty. Now the commodity has been brought under the MRP and they will end up paying duty at a much higher rate.

However, in case of paan parag, sources claim that 50 per cent reduction on the MRP will be allowed to the paan parag manufacturers before they will clear their finished goods. This is done to accommodate theheavy advertisement costs that are incurred by the manufacturers for marketing their end-product.

While paan parag manufacturers have been taxed properly, excise department was expecting that MRP provisions would also be extended to medicine sector which allegedly availed of the advantage of rate difference between the MRP and excisable rates of their respective product on a large scale.

According to the field formations, if the medicine sector would have been brought under the purview of the MRP provisions for assessment purpose, the excessive duty leakage could have been plugged, sources claim.