Court issued notice to the UP govt and Jaypee Group on exemption from entertainment tax granted to the F1 sports event.
The Supreme Court on Tuesday issued notice to the Uttar Pradesh government and Jaypee Group on the exemption from entertainment tax granted to the Formula One (F1) sports event starting October 30 in Greater Noida.
The apex court questioned the Mayawati administration on the rationale to exempt the “elitist” race from the entertainment tax.
A bench headed by Justice DK Jain issued a notice to government and the Jaypee Group, organiser of the sporting event, and asked them to file their response by Friday on why the event was given exemption from entertainment tax.
On a PIL filed by one Amit Kumar, the court issued notices to the UP government and its tax authorities on one hand and the Yamuna Expressway Industrial Development Authority and the organiser Jaypee Sports International Limited on the other.
Kumar said the luxury tax waiver has been granted by the Mayawati government “purely due to the fact that the organiser company is close to the political leadership at the helm in UP’’.
“To give the exercise a measure of legitimacy, a policy was drafted in the name of economic downturn to encourage developers and in this garb the benefit running into crores has been extended for ‘ulterior motives’ and at the cost of the public exchequer and that of the taxpaying citizenry of the country’’, Kumar said.
It was on June 27 last, the UP government granted exemption from entertainment tax to the Formula organiser in India under Section 11(1) of the UP Entertainments and Betting Tax Act, 1979.
This exemption has been granted ignoring the fact that UP is one of the most backward states of the country and advantage of the tax relief goes only to the cash-rich populace that can afford to shell out between Rs2500 and Rs35,000 for a ticket.
Moreover, the Formula-1 racing has “no connection with the general populace’’ at the grassroots level and “panders to the tastes of the very rich and the social and financial elite’’, says Amit Kumar.
Therefore, he has sought scrapping of the tax relief as it’s not in the larger public interest.
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