Formula One: India GP Snared in Tax Dispute
India's Supreme Court Friday ordered the organizers of the country's first Formula One race to freeze 25 percent of revenues from ticket sales in a bank account until a tax dispute is resolved.
Justice D.K Jain and A.R Dave directed the organizers to open a separate bank account and deposit the money until a ruling has been given on the case, which comes just over a week before the event.
An activist has filed a Public Interest Litigation (PIL) in the court challenging a tax break given to the organizers, Jaypee Group, by the local state government where the circuit has been constructed.
Entertainment tax -- usually applicable on large-scale shows, sponsored festivals or sports such as horse racing -- has been waived by the Uttar Pradesh government in northern India.
The PIL claims that Formula One is an "elitist sport" and therefore the organizers should not enjoy tax exemption.
On Tuesday, the new $400 million track was unveiled in Greater Noida on the outskirts of New Delhi, which is part of an ambitious 1,000-hectare (2,500-acre) sports complex.