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Formula One’s return to India moves a step closer with the a new Directorate General of Foreign Trade (DGFT) notification issued on Wednesday, which states that instead of treating race equipment as any other cargo being imported into the country, the importer will instead be required to execute a bond with customs with adequate security/surety to re-export the vehicle(s) within 30 days of the completion of the event.
New Delhi has hosted three races between 2011 and last year, but the grand prix will be absent from the Buddh circuit this season, with many believing the unsupportive government’s strict import laws, meaning cars and equipment are mandatorily held up in customs and subject to hefty duties, contributing to the demise of F1 in India.
The decision will come as a blessing for Jaypee Sports International Limited (JPSI), who have been struggling to deal with rising import duties while organizing the Indian F1 Grand Prix over the last three years. The owners of the Buddh International Circuit(BIC) in Greater Noida, have been depositing amount to the tune of Rs 40 crores a year out of which they are taxed Rs 8 crores since sports ministry refuses to recognize Formula One as a sporting event.
The foreign trade department confirmed the news.
“The decision will be music to the ears of (race promoter) Jaypee … who have been struggling to deal with rising import duties while organizing the Indian grand prix over the last three years,” read report.
Jaypee chief Sameer Gaur confirmed: “It appears to be a positive development for automobile racing in India. We cannot, however, say more without studying the (department’s) order.”
“These vehicles shall not ply on public roads and can only be used within the enclosed premises with requisite safety precautions and will not be engaged in any sort of commercial activities,” the DGFT said.
The main reason for complain from the organizers of the F1 race has been the delay in receiving refund from customs after submitting the duty on time since 2011.
“We never get back the refund on time. An amount of Rs 30 crore is not small by any means and we usually only get it after six months. The amount we deposited last year has not been refunded so far,” sources close to the organizers said.
For motor-sport events held around the world, the practice is to have a custom bonded area at the airport which would enable the F1 cargo to land and immediately be taken to the track where everything is assembled and disassembled, and then flown out of the country after the event. This is done on the premise that nothing is being imported into or exported out of the country, avoiding custom duty.
And Indian motor sport federation chief Vicky Chandhok added: “On behalf of the FMSCI, I welcome this decision to modify the import policy for cars and bikes for racing events. This will pave the way for India to host many more world class international motor-sport events. While we are positive about this move, we would also request for rallying vehicles to be included,”
