With barely a week left for the Formula One racing at Buddh International Circuit in Greater Noida, the Uttar Pradesh Government has decided to withdraw its earlier notification providing exemption on entertainment tax to the organisers of the mega event.
The notification issued by the then Mayawati Government on June 27, 2011 had given a full waiver of 25 per cent tax on earnings from the racing event to Jaypee Sports, the organisers of the race. But the Supreme Court stepped in after a writ petition questioned the rationale behind such an exemption.
Accordingly, Jaypee Group was asked to deposit Rs 36.99 crore as tax for the year 2011.In its fresh application, the Samajwadi Party-led State Government said that Jaypee had yet to pay Rs 12.39 crore from the total tax computed for 2011. Even after the race was held in 2012, the organisers did not respond to the request by the State for details of tickets sold. They “misinterpreted” the June 27, 2011 notification and claimed exemption although its validity lasted for only a year.
Faced with the organisers’ blatant disregard of the court order to deposit the entire tax amount of 2011 and also evade tax for 2012, the application by the State sought withdrawal of the notification. By this decision, the Government expects a huge chunk of revenue into State coffers. The application will be heard by the Court later this week.