MUMBAI
Cola giants Pepsico India Holding Private Limited and Hindustan Coca Cola Beverages Private Limited are currently at loggerheads with a municipal corporation in the state over the levy octroi.
Cola giants Pepsico India Holding Private Limited and Hindustan Coca Cola Beverages Private Limited are currently at loggerheads with a municipal corporation in the state over the levy octroi. The rival aerated drink manufacturers are on the same side of the litigation which contends that octroi can be levied on the cost of the drink but not on the bottle and the crates that it is supplied in.
The municipal corporation in question is the Sangli-Miraj-Kupwad municipal corporation (SMKMC), which charges 3% octroi each on the cost of the beverage, cost of the bottle and cost of the crate.
Both the cola manufacturers have contended that octroi can be levied only on the aerated drink, as it can be charged only on those items that are used or consumed within the limits of the corporation.
Between April 2007 and March 2010, Pepsico has paid Rs8.22 lakh in octroi to the SMKMC, while Coca Cola has paid Rs42.31 lakh. Their counsels argued that bottles and crates are taken out of corporation limits for re-filling, and are hence, not consumed.
The SMKMC’s counsel Ashutosh Kumbhakoni, however, said sometimes bottles brought within the corporation limits break or are not returned by consumers. In such cases, the security deposit of the consumers is confiscated. For cases like these, the corporation can charge octroi and the bottle is technically not out for re-filling. Kumbhakoni suggested that the companies should pay octroi on the price of the drink, bottle and crate and claim refund when it’s being taken out of corporation limits. While Coca Cola has transported 1.81 crore bottles in the SMKMC area in the past three years, Pepsico has sent 24.63 lakh bottles.
After hearing the arguments at length, justice Ranjana Desai and justice RV More have reserved their judgment in the case.
Coca Cola’s counsel also argued that each bottle is recycled eight times and the cost of each bottle divided by eight is charged by the company along with the beverage cost. Therefore, the corporation cannot separately charge octroi on the bottle.
Kumbhakoni countered the argument saying that at the end of eight consumption, the bottle cannot be owned by the consumer as the company claims right of propriety over the bottle and the crate, and is hence liable to pay octroi.
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