Supreme Court has said that Buddh International Circuit(BIC) is a permanent establishment and that it is liable to pay taxes for the income earned in India. The judgement was delivered by a Bench of Justices AK Sikri and Ashok Bhushan yesterday.
While Senior Advocate S Ganesh appeared for Formula 1/ FOWC, Senior Advocates Arvind Datar and Dushyant Dave appeared for Jaypee Sports International Limited (Jaypee). Attorney General Mukul Rohatgi appeared for the Income Tax Department.
FOWC granted Jaypee the right to host, stage and promote Formula 1 Grand Prix of India for a consideration of US$ 40 million.
FOWC got an initial reprieve when AAR rule that it did not have any Permanent Establishment in India, the High Court reversed the said ruling. The Supreme Court in its judgment proceeded to consider the issue in detail.
After going through the case in detail, The Court categorically concluded that the FOWC was carrying on commercial and business activity in India.