Media personnel outside the BBC office amid a survey operation conducted by Income Tax Department as part of a tax evasion investigation, at KG Marg in New Delhi, Tuesday, Feb. 14, 2023. (PTI)
NEW DELHI: The Income Tax department on Tuesday surveyed four premises of the British Broadcasting Corporation (BBC), including in Delhi and Mumbai, over its alleged non-compliance with Transfer Pricing Rules (TPR), which sparked a global furore.
Coming as it did weeks after the BBC aired a controversial documentary, India: The Modi Question on the 2002 riots in Gujarat, the Opposition saw it as intimidation and vindictive action, while the BJP attacked the broadcaster for what it called ‘venomous’ reporting.
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Sources claimed the BBC had illegally diverted profits out of India by flouting TPR provisions. TPR is applicable to multinationals operating in multiple global locations. Profits generated by offices of different countries come under the ambit of tax laws of the country of operations.
For its part, the BBC said it was fully cooperating with the tax authorities, adding it hoped the matter would be resolved as soon as possible. According to sources, the BBC had been non-compliant with the TPR for years despite several reminders from the tax department. The focus of the survey was to look into manipulation of prices for unauthorised benefits, including tax advantages.
Also read: Intimidation tactics to muffle criticism: Opposition
The I-T department is empowered to conduct a survey on the premises of a business entity during business hours. It can search files, laptops, computers, hard drives or any other digital storage devices associated with the business entity, to collect information. However, raiding residences and other locations of its promoters or directors is out of scope for a survey.
BBC staffers were asked to deposit their phones at a particular spot inside the premises and cooperate. Some computers were seized and mobile phones of some staff members were cloned, officials said.
Union Information and Broadcasting Minister Anurag Thakur said no one is above the law and that the I-T department will share details about the survey after it is over.
Transfer pricing refers to prices of transactions between associated enterprises which may take place under conditions differing from those taking place between independent enterprises. It refers to the value attached to transfers of goods, services and technology between related entities. It also refers to the value attached to transfers between unrelated parties that are controlled by a common entity.
Synchronised action since 11 am
The action began at 11 am with income tax officials reaching BBC’s offices in Delhi, Mumbai, Gurugram and one more location. The survey operation continued till late evening.
