In a long-standing case, India’s apex court has upheld Delhi High Court’s decision to tax three Formula 1 races held in the country between 2011-13.

It stated that the Buddh International Circuit, owned by Jaypee Group, served as a ‘permanent establishment’ for conducting business by Formula 1.

A permanent establishment in India is defined as any fixed place of business, wholly or partially carried out by a foreign enterprise operating in India.

Following the hearing, an assessing officer will decide the amount of tax to be levied. According to Business Standard, the tax will be levied at a rate of 40% on the total business income, with additional interest imposed over and above it.

“We have held that FOWC has PE in India and income that is attributable in India will be taxed. The amount that is to be taxed is to be assessed by an assessing officer,” said a Supreme Court bench.

The Supreme Court also stated that the payment made by Jaypee to FOM for use of symbols and logos will be treated as business income and not royalty.

It was argued that such symbols were used for hosting the event and not for intellectual property purposes.

Jaypee Group had signed a five-year contract with FOM to host Formula 1 races between 2011-15, but the event was dropped after three years due to bureaucratic and financial issues.