Sure. But why not allow the same money as a tax-free allowance.
A company wants to provide food to its employees and instead of getting into the messy business of having a full-fledged cafeteria simply pays the employee an allowance.
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In comes the taxman to complicate matters. He insists that the company should ensure that the money is indeed spent on food. What does the company do? It approaches Sodexho to buy vouchers that can be redeemed only against food. It is a completely different matter that my resourceful kiranawala has put up a poster saying that he will accept Sodexho Lunch Coupons for non-food items as well, but will charge 3% extra for that privilege!!!!!
My point is that these food vouchers have no raison d'être.
The government allows Rs. 800 a month as conveyance allowance without asking the company to issue travel vouchers. Then why make the distinction for food?
As long as the person spends Rs.1500 on food sometime during the course of the month it does not matter what he uses to pay in any specific transaction. So long as the tax authorities are certain that a person spends Rs.1500 a month on food items why have these silly passes.
By insisting on Food Vouchers the govt. has inadvertently allowed a multinational to issue “Currency”. Also any company accepting deposits from the public at large is regulated by the RBI. Wonder if Sodexho’s books are open to such scrutiny.
Authored by Sameer Nair