Sodexo Meal Vouchers are not ‘goods’, not liable for Octroi or LBT

By | December 14, 2015

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 4385-4386 OF 2015

SODEXO SVC INDIA PRIVATE LIMITED …..APPELLANT

VERSUS

STATE OF MAHARASHTRA & ORS. …..RESPONDENTS

Facts of the case

The appellant company is conducting the business of providing pre-printed meal vouchers which are given the nomenclature of ‘Sodexo Meal Vouchers’. As per the appellant, it enters into contracts with its customers for issuing the said vouchers. These customers are establishments/companies having number of employees on their rolls. They provide food/ meals and other items to their employees up to a certain amount. It is for this purpose that the agreement is entered into by such establishments/companies with the appellant for issuing the said vouchers. After receiving these vouchers for a particular denomination, some are distributed by the companies to its employees. For utilisation of these vouchers by such employees, the appellant has made arrangements with various restaurants, departmental stores, shops, etc. (hereinafter referred to as ‘affiliates’). From these affiliates, the employees who are issued the vouchers can procure the food and other items on presentation of the said vouchers. The affiliates, after receiving the said vouchers, present the same to the appellant and get reimbursement of the face value of those vouchers after deduction of service charge payable by the affiliates to the appellant as per their mutual arrangement. In this manner, the appellant, by issuing these vouchers to its customers, gets its service charge from the said companies. Likewise, the appellant also takes specified service charges from its affiliates. A diagramatic representation of the business model of the appellant is as under:

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Issue

whether these vouchers can be treated as ‘goods’ for the purpose of levy of Octroi or Local Body Tax (LBT) or the aforesaid activity only amounts to rendering service by the appellant.  ?

Held

Sodexo Meal Vouchers are not ‘goods’ within the meaning of Section 2(25) of the Act and, therefore, not liable for either Octroi or LBT.

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