How can Indian govt demand absurd taxes from F1, asks Mallya

Force India team principal Vijay Mallya feels the Indian government needs to resolve the tax issues faced by the Formula 1 teams.

Mallya's comments came on a day when F1 boss Bernie Ecclestone confirmed that the Indian Grand Prix will be dropped for 2014 to return in the first half of 2015.

F1 teams have been finding it tough to deal with India's strict tax policies, including the customs duties levelled on them and the drivers on each visit.

Mallya said it would be a pity if tax issues jeopardise the Indian GP, which started in 2011.

Reuters

Mallya's comments came on a day when F1 boss Bernie Ecclestone confirmed that the Indian Grand Prix will be dropped for 2014 to return in the first half of 2015. Reuters

"Yes there is a problem with India's tax authorities, but India's tax authorities tend to be a very difficult bunch," Mallya was quoted as saying by ESPN on Tuesday.

"They even launched a humongous tax claim on Vodafone and Nokia and other multi-national companies. This sort of standoff on taxes is nothing unusual.

"Their logic is that there are 19 races and one race is India, therefore 1/19th of all revenue generated in Formula One is subject to Indian tax. From a narrow-minded, Indian taxman's point of thinking maybe that is justifiable, but we need to sit down with them and engage with them and say, 'Listen, this is not the only country that's hosting an F1 race. There are other countries that have been hosting F1 races for decades and they don't make the same demands. So how can you," asked the businessman.

The liquor baron said it is important that the government interact with Formula One Management on the matter.

"The Indian government on one side say they want India to be modern, vibrant country and want the global society and global industry and global sport to take notice of India and its potential. But the irrational behaviour by the taxman doesn't support such a mission. So it's a question of sitting around the table and hammering it out with them."

Mallya felt the Indian Grand Prix is beneficial for India as well as the sport.

"It's a fantastic track, the drivers love it, the teams love it. India is a country with huge potential. One point three billion people and 50 percent of them are youngsters. There can't be a better environment for Formula One's future."

IANS