Revenue Dept To Look Into Akai Home Theatre Tag

The revenue department has decided to investigate the launch of the Akai home theatre by Baron International at one-third the price of competing brands in the domestic market.

The Akai home theatre consists of a colour television (with the option of a 21, 25 or 29 inch CTV), one powered subwoofer with built-in amplifier, and six speakers with a combined output of 1,000 watt PMPO, all at a throwaway price. For instance, the system with a 21 inch CTV is priced at Rs 24,990 (under the exchange offer).

In contrast, a BPL home cinema, which includes a 21 inch colour television, video and audio CD, and prologic decoder with 5 speakers producing 1,300 watts is priced at around Rs 85,000.

 

The foreign brands are even more expensive. A prologic decoder alone from Sony or Samsung would cost around Rs 55,000.

Even in the middle category segment, a decoder would cost around Rs 20,000, a 21 inch colour television from BPL or Videocon Rs 15,000-Rs 20,000, and a VCR anywhere between Rs 10,000 and Rs 15,000.

According to revenue department officials, the pricing of the Akai home theatre has raised questions about the manufacturing cost of the components as well as the maximum retail price (MRP) structure declared by the company.

The company could not be contacted by Business Standard for its comments since its offices were closed on Thursday. The departments move follows a series of raids on the office and factory premises of Viacom (the company which manufactures Akai products in India) and seizure of goods worth Rs 11 crore by the central excise department.

Officials claimed that Kabir Mulchandani, managing director of Baron International (which markets Akai products in India), has agreed to temporarily pay an additional excise duty of Rs 300 per colour TV until investigations into the case are completed.

The department had alleged that the MRP declared by the company on Akai CTV sets under the much-hyped exchange offer was abnormally low compared with that of competing CTV brands. As such, the assessable value for excise imposition and actual payment of duty by the company was also extremely low.

The declared MRP on Akai CTVs was allegedly compressed by not including the actual value of the old colour television which went to the dealers as their commission.

For every new Akai CTV sold under this scheme, the company made an invoice of Rs 1,500 for the old CTV to the dealer before hand. However, the old CTV could have been sold for Rs 4,000-5,000 in the rural areas, point out revenue officials.