Tax waiver to Formula One irks apex court
Sport won’t benefit UP, says petition
The Supreme Court on Tuesday issued notice to the Uttar Pradesh government for granting Entertainment Tax waiver to a private company for organising Formula One racing event in the state, stating that there was ''no justification for one of the most backward states'' to provide such relief.
A bench headed by Justice D K Jain also sought the response of Jaypee Sports International Ltd by Friday, on a public interest litigation (PIL) filed by Amit Kumar contending that the sport pandered to the tastes of rich and elite only.
The petition, mentioned as an urgent matter, submitted that there was no justification to grant exemption to the company from paying Entertainment Tax. The company has benefitted by crores of rupees, courtesy Mayawati-led BSP government in the state, regarded as “one of the more backward states of the country,” it said.
The Formula One grand prix is slated for October 30. The track is estimated to have been built at a cost of US $350 million. Branding F1 racing as “an elitist and dangerous sport,” the petitioner alleged that the company was close to the ruling party and its political leadership.
Only for rich and famous
“The Formula-1 racing sport has not connection with the general populace at the grassroots level and panders to the tastes of the very rich and the social and financial elite. Therefore, exemption from payment of Entertainment Tax was not warranted,” the PIL said.
The tax exemption is not going to lead to a mass-based popularising of F1 racing sport by the company, which would nevertheless make a killing from the event, the petition said.
Drawing a parallel with Indian Premier League (IPL), Kumar, the petitioner, submitted that the Madras High Court had in an order on July 19, directed the Commissioner, Tax Department to look into the prospect of collecting Entertainment Tax for the conduct of IPL matches in the city as tickets sold were priced from Rs 500 to Rs 25,000.
