Thus, as per the aforesaid authorisation by the RBI, the business operation that is carried out by the appellant, has the following essential features the payment system operated by the appellant involves issuance of vouchers having a face value meal and gift vouchers to the customers customers grant said vouchers to their employees beneficiaries the employees use the vouchers to obtain pay for food, meal or goods vouchers can only be used in an affiliated network of restaurants and shops affiliates redeemers the affiliated restaurant shop having delivered the food meal good, receives the voucher and turns it to the appellant who issued it for reimbursement of the face value redemption and when the vouchers are redeemed, the appellant reimburses to the affiliate redeemer the face value of the voucher and retains a service fee in order to companypensate for the attractiveness of the system which has benefited to the affiliates business.
A diagramatic representation of the business model of the appellant is as under On the basis of the aforesaid arrangement made by the appellant with its customers as well as its affiliates, the question that has arisen for companysideration is as to 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.
From these affiliates, the employees who are issued the vouchers can procure the food and other items on presentation of the said vouchers.
Further, the guidelines on Know Your Customer Anti Money Laundering Combating Financing of Terrorism issued by the RBI to Banks, from time to time shall apply mutatis mutandis to the entity.
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.
Likewise, the appellant also takes specified service charges from its affiliates.
The appellant pays service tax on such service fee charged.
In this manner, the appellant, by issuing these vouchers to its customers, gets its service charge from the said companypanies.
For utilisation of these vouchers by such employees, the appellant has made arrangements with various restaurants, departmental stores, shops, etc.
After receiving these vouchers for a particular denomination, some are distributed by the companypanies to its employees.
It is for this purpose that the agreement is entered into by such establishments companypanies with the appellant for issuing the said vouchers.
hereinafter referred to as affiliates .
