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SBD Global/October 25, 2013/Events and Attractions

Indian Supreme Court To Hear Demand To Cancel Indian Grand Prix Over Tax Dispute

German F1 driver Sebastian Vettel inspects the track at the Buddh Int'l Circuit Thursday.
India's Supreme Court agreed Thursday "to hear a petition seeking the cancellation of this weekend's Indian Grand Prix" because organizers have allegedly not paid entertainment taxes for the '12 event, according to the AFP. The Supreme Court, which has exec powers, ordered organizers two years ago to freeze 25% of ticket revenues "until they had settled a tax dispute with the state where the racetrack is located." That ruling came in response to Public Interest Litigation filed by campaigner Amit Kumar, "who is also behind Thursday's petition seeking cancellation of the race on Sunday." Kumar successfully argued in '11 that F1 was entertainment and not sport, "and should not benefit from tax exemptions granted by the state of Uttar Pradesh which borders the capital New Delhi." Entertainment tax, applicable for large-scale shows and sponsored festivals, "has been levied on tickets this year for the first time" (AFP, 10/24).

'RACE WILL GO ON': REUTERS' Amlan Chakraborty wrote Indian Grand Prix organizers have confirmed that Sunday's race "will go ahead even though the country's top court has agreed to hear a petition on Friday seeking its cancellation over tax issues." Federation of Motor Sports Clubs of India President Vicky Chandhok said, "The race will go on. There's absolutely no doubt about that. This has happened many times before. You've had people trying to stop cricket matches ... our justice system is pretty strong that no sporting event should be stopped" (REUTERS, 10/24). In New Delhi, Sharmistha Mukherjee wrote the excitement over the Indian edition of the F1 motor race "seems to have dimmed," with only 40% of the available capacity of 100,000 having been sold over the three months up to the event on Sunday. The tepid response is despite the organizers, Jaypee Sports Int'l, "cutting tickets prices for the three-day event" by 30-43% in the current season. Ticket prices for the Friday-Sunday spectacle are between Rs 2,000 ($32.50) and Rs 21,000 ($342), compared to Rs 3,500-30,000 ($57-$488) "charged by the organisers in the previous season." Turnout at the race "has dropped for consecutive years" to an expected 65,000 this year, from 67,000 in '12 and 95,000 in the initial edition in '11. JPSI "is understood to have clocked revenue" of Rs 100 crore ($16M) and Rs 85 ($14M) crore from ticket sales in '11 and '12, respectively. The "gloom over the poor traction in India and the regulatory issues" have resulted in the country being dropped as a host in '14 (Indian BUSINESS STANDARD, 10/24). The AFP reported the Indian GP "has been hit by a troubled economy and sliding rupee, government apathy towards the sport, a lop-sided financial arrangement and the lack of a local driver." The promoters pay about $40-45M to F1 every year as a licensing fee and about $1.6M "to the Indian government for permission to hold the race." With all advertising and merchandising revenue also going to F1, "the only source of income for the promoters is from the sale of tickets, which has dropped markedly" (AFP, 10/24).

WEBBER: FANBASE GROWING: IANS reported Red Bull driver Mark Webber Thursday said India has shown "incredible enthusiasm" for F1 despite cricket being the No.1 sport in the country. Webber: "Obviously the fan base is certainly growing very, very fast. I know cricket is the No.1 sport here by a long way but they've certainly shown some incredible enthusiasm to try and understand and attract some interest in the sport" (IANS, 10/24). The DECCAN HERALD's Roshan Thyagarajan wrote many circuits have been part of the "Survival of the Fittest" trend since the first Grand Prix in history, but no one anticipated that the Buddh Int'l Circuit would ever find itself on this list of potentially "endangered" tracks. F1 has run races in 69 circuits since Silverstone in '50 and they "will barely feel the pinch of losing out on one race be it India or Korea." The Indian motorsport fraternity, however, "can ill-afford to lose out on the one race that has boosted the profile of the sport in the country" (DECCAN HERALD, 10/24).
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