Dabur contests Nepal's tax

Dabur India's wholly owned subsidiary, Dabur Nepal, has moved the Supreme Court in the mountain kingdom for being singled out as the only chyawanprash marketer in the country that might have to pay value-added tax (VAT), as suggested by Nepal's tax department.

Dabur's Chyawanprash "� a health concoction made from herbs, and its ayurvedic digestive pill, Hajmola, have come under the scanner of the country's Department of Tax, which means the company might be compelled to pay between 10 and 12 per cent VAT on these products.

The reason these products had so far been kept out of the purview of this tax was because Nepal's Department of Drugs Administration had certified these as medicines.

The parent company, however, pays VAT on these products in India.

However, Dabur Nepal's grudge stems from the fact that other players in the chyawanprash space, including Indian companies such as Himani, Vaidyanath and Zandu are not under the tax net.

Dabur, which garners considerable sales from its Chayawanprash brand, is third in terms of marketshare in Nepal. Company officials declined to comment on the case saying the matter was sub-judice.

Dabur Nepal was set up as an independent group company in 1992 and contributes around 12 per cent of the total turnover of the group.