The Supreme Court in India has ruled that Formula One World Championship Ltd has a permanent establishment for its business in India and therefore income accruing from it is taxable. An assessment officer will now assess what the company will have to pay.
The Jaypee Group organised Formula 1 car races in Greater Noida between 2011 and 2013, but the five-year contract with Formula One Management (FOM) was not fulfilled because the race was cancelled in 2014 because of a tax dispute with the Uttar Pradesh government. The Delhi High Court ruled last year that a payment made by the promoters for the use of FOWC logos and symbols to promote the Grand Prix could not be considered a royalty and be taxed as such.
This pretty much guarantees that Formula 1 will not be returning to India any time soon, as the bureaucracy involved makes the race untenable. Indian fans will thus have to wait until the red tape folk catch up with the rest of the world – and that could take a long time.