BBC Didn’t Pay Tax On Certain Remittances, Says Income Tax Dept After 3-Day Survey

New Delhi: The income or profit shown by British Broadcasting Corporation (BBC) is not commensurate with the scale of operations in India, according to the Income Tax (I-T) department.

I-T’s finding after its ‘survey’ of BBC’s India offices over the last three days, spanning over 58 hours.

The survey, carried out amid a row over BBC’s recent two-part documentary on Narendra Modi – questioning his role as Gujarat CM during the 2002 Godhra riots – showed that despite substantial consumption of content in various Indian languages (apart from English), the income shown is not in proportion with the operations.

“During the course of the survey, the Department gathered several evidences pertaining to the operation of the organisation which indicate that tax has not been paid on certain remittances which have not been disclosed as income in India by the foreign entities of the group,” the I-T department said.

The three-day survey, during which I-T officials stayed overnight at BBC’s Delhi and Mumbai offices to question its employees, revealed that services of seconded employees have been utilised for which reimbursement has been made by the Indian entity to the foreign entity concerned.

“Such remittance was also liable to be subject to withholding tax which has not been done,” I-T stated.

“Further, the survey has also thrown up several discrepancies and inconsistencies with regard to Transfer Pricing documentation. Such discrepancies relate to level of relevant Function, Asset and Risk (FAR) analysis, incorrect use of comparables which are applicable to determine the correct Arms Length Price (ALP) and inadequate revenue apportionment, among others,” I-T said.

Laptops and mobile phones of some employees were checked during the survey, with BBC asking its staff not to make any survey-related comment on social media or delete anything from their phones.

Opposition leaders have been questioning the Central government’s sudden move to conduct a survey of BBC’s India offices.

The Congress even described it as an ‘undeclared emergency’.