Posted On by &filed under Media & Entertainment News, Tax Law News.

The Supreme Court Tuesday issued notice to the Uttar Pradesh government and the Jaypee Sports International Ltd. on a plea challenging the grant of exemption for entertainment tax on the three-day Formula One (F1) sports event starting in Greater Nodia Oct 28.

The Supreme court bench of Justice D.K. Jain, Justice Anil R. Dave and Justice S.J. Mukhopadhaya issued the notice after petitioner’s counsel Sanjeev Sen told the court that exemption under entertainment tax could only be given in public interest and for public benefit.

Appearing for petitioner Amit Kumar, Sen told the court that F1 racing was an elitist sport and there was no justification for the state to grant exemption from payment of entertainment tax to Jaypee Sports International Ltd.

Sen told the court that the tickets for the event ran into thousands of rupees. He wondered what benefits would accrue to the public by granting entertainment tax exemption to the organisers of F1 event.

The petition said that ‘…the Formula One racing sport 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 and therefore the grant of exemption from the payment of entertainment tax was not warranted’.

The grant of exemption from payment of entertainment tax was bad in law because the said exemption was not going to lead to a mass-based popularising of the F1 racing by the sponsors of the event, it said.

The private sponsors of the F1 event would ‘just make a killing from the event and nothing will be heard of the matter again’, the petition said.

The petition said that since ‘Jaypee Sports International Ltd. is a private body, it is a moot question as to how the benefits of the exemptions will percolate to the personnel in the civic and police establishment’.

The petition also sought to know who will bear the huge cost of civic services and police deployment for the racing event.

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