According to official sources, Dolo-650 manufacturer Micro Labs has “sought to evade” Rs 300 crore tax by claiming artificially inflated deduction under special provisions in respect of certain incomes. The company has also provided freebies worth Rs 1,000 crore by debiting in its books of account unallowable expenses for travel expenses, perquisites and gifts to doctors and medical professionals for promoting the group’s products under the heads “promotion and propaganda”, “seminars and symposiums”, “medical advisories” etc, the sources added.
The income tax department said without naming the company that carried out search and seizure operations on July 6 on a “Bengaluru-based pharmaceutical group”, engaged in the business of manufacturing and marketing of pharmaceutical products and Active Pharmaceutical Ingredients (API). The group has a presence in over 50 countries.
“Instances of violation of provisions of tax deduction at source under section 194C of the Income-tax Act, 1961 have also been detected in respect of transactions under contracts entered into with the third-party bulk drug manufacturers,” the department said.
Unaccounted cash amounting to Rs 1.2 crore and unaccounted gold and diamond jewellery worth more than Rs 1.4 crore have also been seized during the search. The search action covered around 36 premises spread across 9 States.
After Covid-19 broke out in early 2020, the company recorded a whopping sale of 350 crore Dolo tablets till January 2022. Dolo-650 was one of the most prescribed pills to manage Covid-induced fever and virtually became a household name across the country.
