FMSCI, the national governing body for motor sport, today said that time has come for the Indian government to understand the economic benefits which the Formula One race brings to the country and lend more support to the event by waiving the import duty on equipments that came along with it.
The organisers -- Jaypee Sports International (JPSI) -- delivered another successful race yesterday with the facilities coming in for praise from drivers as well as the F1 boss Bernie Ecclestone.
However, the Indian government has never looked enthusiastic for the high-profile motor sport event and actually considers it a commercial venture of the JPSI.
JPSI contributes Rs 10 crore every year towards the National Sports Development Fund, under the guidelines, to get necessary approval for the event.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) had also said that F1 race could generate revenues of over Rs 90,000 crore in the next 10 years and create 15 lakh new job opportunities for technical, skilled and commercial workers in the country.
Federation of Motor Sports Club of India (FMSCI) President Vicky Chandhok, who is also a consultant for the F1 race, said the government should change its perception about the F1 race.
"There is huge improvement in tourism and everything else. It's time that our government look at it differently. It will take time. It's difficult in a country like ours, which is a huge democracy. It's difficult for people to accept or to understand how the economics work (in F1)," Chandhok told PTI in an interview.
"The event is already on with or without government support. The government should independently make an evaluation of countries where the government is funding, how it has been economically beneficial for all," he said.
A lot of expensive equipments, including the cars, tyres and fuel, come to the country and the organisers pay temporaryimport duty on the equipments on the condition that these will be re-exported.
The estimated cost of F1 paddock runs into hundreds of crores and the organisers pay about Rs 8 crore as duty on goods which are consumed during the race, like wine and fuel.
The teams are also wary of the customs rules in the country and McLaren technical director Paddy Lowe had even termed the Indian GP as the "most awkward race of the year in terms of Customs issues".
JPSI says the central and the state governments of Delhi and Uttar Pradesh should promote the event since it attracts a lot of tourists and the benefits would go to them only.
"It's not just JPSI's event. It's India's event. So if tourists come, they stay in hotels, go around, do shopping, eat at restaurants. JPSI does not get that money, it goes to the several quarters including the government as there are some taxes that tourists pay," Askari Zaidi, Head of Communications for Jaypee Group, told PTI.
"The government should waive duty on consumable goods. Tourism ministry should also take interest in the race since it eventually attracts tourists to the country. We pay 10 crore towards Sports Development Fund and this money should be used in promoting motor sport in the country," he added.
Chandhok said it was baffling that the import duty was not levied on other international motor sport events in the country but things changed after the coming of F1.
"In the last 15-20 years, permission to hold international motor sport events was always granted without any duty being paid. After F1 they say, pay the import duty and when you export it (equipment) back, we will refund the money. They should waive it (import duty) and support the race," he said.
Chandhok cited the example of many nations, where the government supports the event. "In countries like Singapore, Australia, Canada, they pay rights fee because they see the long term benefits, so they try to make sure that the event is well funded."
Published Date: Oct 29, 2012 05:48 pm | Updated Date: Oct 29, 2012 05:48 pm