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Indian GP tax issues must be resolved - Mallya

Vijay Mallya: "It's a question of sitting around the table and hammering it out with them" © Sutton Images

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Force India boss Vijay Mallya has called on Indian government officials to open a dialogue with Formula One and resolve the tax issues hanging over the Indian Grand Prix.

India's strict tax regime has caused a headache for Formula One since it first started racing in the country in 2011, with high customs duties and even corporation and personal tax being levelled at the teams and drivers on each visit. This year's race has been called into question over the issue and there is a chance next year's race could be called off completely.

Mallya, who is no stranger to Indian tax law after blaming high taxes for the struggles his airline business faces, said the country could not afford for its tax policy to get in the way of the grand prix.

"Yes there is a problem with India's tax authorities, but India's tax authorities tend to be a very difficult bunch," he told ESPN. "They even launched a humongous tax claim on Vodafone and Nokia and other multi-national companies. This sort of standoff on taxes is nothing unusual.

"Their logic is that there are 19 races and one race is India, therefore 1/19th of all revenue generated in Formula One is subject to Indian tax. From a narrow-minded, Indian tax man's point of thinking maybe that is justifiable, but we need to sit down with them and engage with them and say, 'Listen, this is not the only country that's hosting an F1 race. There are other countries that have been hosting F1 races for decades and they don't make the same demands. So how can you?'

"The Indian government on one side say they want India to be modern, vibrant country and want the global society and global industry and global sport to take notice of India and its potential. But the irrational behaviour by the taxman doesn't support such a mission. So it's a question of sitting around the table and hammering it out with them."

Mallya said the Indian Grand Prix is mutually beneficial for both his country and Formula One.

"It's a fantastic track, the drivers love it, the teams love it. India is a country with huge potential. 1.3 billion people and 50% of them are youngsters. There can't be a better environment for Formula One's future."

© ESPN Sports Media Ltd.