With barely 10 days left for the Formula 1 event, the Supreme Court on Tuesday directed Uttar Pradesh government to furnish an explanation over its decision to grant entertainment tax exemption to M/s Jaypee Sports International Ltd, the organisers of the event.
Meerut resident, Amit Kumar, has challenged the UP government's decision of exempting the company from paying entertainment tax. Acting on the petition, a bench headed by DK Jain issued notice to the state, its Commissioner (entertainment taxes) and the event's organiser. All have been directed to file their affidavits before October 21, the next date for hearing before SC.
Accusing the state administration of favouring the company, as it "is very close to the political leadership and the ruling Government in the State of U.P", the petition stated: "Formula 1 racing is an elitist and dangerous sport, there was no justification for the State Government of Uttar Pradesh to grant exemption from payment of entertainment tax to M/s Jaypee Sports International Ltd."
Claiming the exemption would benefit the company to the tune of crores of rupees, it said: "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 and therefore the grant of exemption was not warranted in the facts of the case."