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India's first Formula One race, to be held inGreater Noidaon October 30, has come under the Enforcement Directorate (ED) scanner. The ED has asked the race's organiser Jaypee Sports International (JPSI) to reveal the source offundingfor the expensive event.
The ED has issued several notices to the JPSI to find out if it had violated the Foreign Exchange Management Act and the income tax guidelines while raising funds for the event. The ED issued its last notice on September 27 and asked the JPSI to explain the source of the ` 200 crore it received through its Cyprus associate Indesign Enterprises.
Indesign had given a bank guarantee of Rs 180 crore to the Formula One administration without the RBI's permission.
Though the JPSI informed the apex bank later and offered to pay a penalty, the ED is going ahead with its enquiry.
Even as the upcomingIndian Grand Prix looked like it was racing towards a perfect start, the country's inaugural Formula 1 race has hit a roadblock. Just 45 days before the race, the organisers and the government are locked in a tussle over custom duties.
The customs department has been insisting that Jaypee Sports International (JPSI) -- the promoter of the Indian GP racetrack -- pay duty upfront on all equipment being brought into the country for the race. It is estimated that the total duty could come to Rs 600 crore or more.
JPSI, on its part, has been pushing for the practice that is followed in other countries where a custom bonded area is declared for the track. This would allow F1 cargo to be immediately taken to the track, assembled and then flown out after the race, avoiding any sort of custom duty.
The government, however, has been bizarrely classifying F1 as entertainment and not sport, which means no such exemption to it. As a result JPSI might be forced to pay the entire duty to allow the equipment to come into the country. After a deduction of 2 per cent, the remaining amount would be returned by the customs department.
F1 organisers come under ED scanner : India: News India Today
The ED has issued several notices to the JPSI to find out if it had violated the Foreign Exchange Management Act and the income tax guidelines while raising funds for the event. The ED issued its last notice on September 27 and asked the JPSI to explain the source of the ` 200 crore it received through its Cyprus associate Indesign Enterprises.
Indesign had given a bank guarantee of Rs 180 crore to the Formula One administration without the RBI's permission.
Though the JPSI informed the apex bank later and offered to pay a penalty, the ED is going ahead with its enquiry.
Even as the upcomingIndian Grand Prix looked like it was racing towards a perfect start, the country's inaugural Formula 1 race has hit a roadblock. Just 45 days before the race, the organisers and the government are locked in a tussle over custom duties.
The customs department has been insisting that Jaypee Sports International (JPSI) -- the promoter of the Indian GP racetrack -- pay duty upfront on all equipment being brought into the country for the race. It is estimated that the total duty could come to Rs 600 crore or more.
JPSI, on its part, has been pushing for the practice that is followed in other countries where a custom bonded area is declared for the track. This would allow F1 cargo to be immediately taken to the track, assembled and then flown out after the race, avoiding any sort of custom duty.
The government, however, has been bizarrely classifying F1 as entertainment and not sport, which means no such exemption to it. As a result JPSI might be forced to pay the entire duty to allow the equipment to come into the country. After a deduction of 2 per cent, the remaining amount would be returned by the customs department.
F1 organisers come under ED scanner : India: News India Today
