Indian race faces customs row

The race organisers could end up footing a Custon Duty bill © Press Association

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The Indian Grand Prix is facing a customs row just six weeks before the teams are due in the country for the race.

The Indian Government is insisting that the race organisers - Jaypee Sports International (JPSI) - must pay customs duty up front on all equipment coming in to the country for the race. This is not the normal practice around the world, as all of the other races have a custom bonded area in place, allowing F1 equipment to land and go straight to the circuit for assembly and use, with the premise that it is exported back out of the country following the race.

A report in The Times of India claimed that since the government does not classify Formula One as a sport - rather as entertainment - it was not willing to grant any exemption to the organisers. As a result, JPSI will have to pay Custom Duty on the temporary import of F1 equipment to the country, but CEO Sameer Gaur says that they have "in-principal approval" for custom exemption and they are even ready to pay whatever duty is required to ensure the race goes ahead.

"JPSI has full support from the government, the sports ministry and the customs department for the F1 event scheduled for October this year," Gaur said. "We have an in-principle approval from the customs department for creating a customs bonded area for F1 equipment that will be temporarily imported to India.

"If required, as per the law of the land, JPSI will pay customs duties and taxes etc. For the temporary import of equipment. The estimated value of this equipment is about Rs 150 crore (£20million) and the final duty payable on this will be approximately Rs eight crore (£1million)."

While JPSI's assurances should allay any fears the teams had of being charged, it appears that the organisers footing the bill is the most likely outcome. S D Majumder, the chairman of the Central Board of Exise and Customs, told PTI that exemption cannot be granted to JPSI since the F1 race is not an event of national importance, but that it would get back the majority of the Custom Duty.

"When equipments are imported for sports events of national importance, the Sports Ministry issues a certificate, on the basis of which Customs Department issues exemption notification subject to them (equipment) getting exported back," Majumder said. "For Commonwealth Games and the (cricket) World Cup, those certificates were issued, so we gave exemption.

"In this case, the Sports Ministry has not given any certificate, so there is no question of granting any exemption. As it is, there are entitled to get Duty drawback up to 98% on the equipment imported. So effectively, they will have to pay only around 2%. This is not an event of national importance so no such exemption is required."

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