SC order soon on soft drink bottle octroi

The Supreme Court will soon give its decision on whether soft drink companies like Hindustan Coca-cola Beverages (HCCB) and PepsiCo India Holdings should pay octroi on glass bottles and crates separately, despite the value of same being included in the price of the aerated beverage.

A Bench headed by Justice M K Sharma has reserved its judgement on the pleas of both softdrink majors who opposed the move by a Maharashtra civic body to levy octroi on the glass bottles and plastic crates used by the manufacturers to pack and transport their aerated drinks by considering them as a distinct and separate articles from the beverage that they contain.

Challenging the Bombay High Court?s order that upheld the Sangli, Miraj, Kupwad City Municipal Corporation?s decision to charge such levy, HCCB said that the high court failed to appreciate that the value of the softdrink includes the value of the bottles and crates and the two cannot be separated.

?Aerated waster being a beverage, which is a liquid, cannot be transported distributed and marketed without the bottles and crates and, therefore, they have no independent identity of their own, but only as containers for the purposes of taxation, and hence octroi cannot be separately charged thereon,? HCCB stated in its petition. It further argued that once the cost of the bottles and crates had been included in the value of the beverages, there arises no question of charging the octroi separately on the bottles or crates again on ad volerum basis, thereby resulting in double taxation.

According to companies, the glass bottles and crates were proprietary in nature and no rights were transferred or created in favour of distributors or ultimate customers. Besides, the bottles and crates are to be returned as per the predetermined contracts between the companies and distributors, they added.

Opposing the companies, the civic body argued that to claim refund the manufacturers should establish that the bottles and crates brought within its municipal limits were sold, used or consumed within these limits.