Formula One income taxable in India, says Supreme Court

Source – indiatimes.com

NEW DELHI: The Supreme Court said the Formula One motor racing championship had a permanent establishment in India, making income generated taxable in the country, marking a key victory for the tax department. The decision is seen as having wide implications for foreign companies that do business in the country.

The apex court upheld a high court ruling that had overturned a decision by the Authority for Advance Rulings. The ruling by a division bench led by justice AK Sikri held that Formula One had a permanent establishment in India and income attributable to it was liable to taxation. It mandated the assessing officer to determine the income attribution.

The case was argued by attorney general Mukul Rohtagi along with special counsel GC Srivastava, DL Chidananda and others.

Srivastava said the order has ramifications that stretch beyond India.