‘BBC’s profits do not match scale of its India operations’
2 min read . Updated: 18 Feb 2023, 06:17 AM IST
Premium- The I-T department survey was held at the Delhi and Mumbai offices of the UK’s national broadcaster
NEW DELHI : The income tax department on Friday said the three-day survey earlier this week at the business premises of a prominent international media company found that profits of the group’s entities were not commensurate with their scale of operations in India, but chose not to name BBC.
The I-T department survey was held at the Delhi and Mumbai offices of the UK’s national broadcaster.
In a statement, the I-T department alleged that during the survey—a way of finding information by visiting officials, but not as rigorous compared to searches—evidence has been found showing that tax has not been paid on certain remittances that were not disclosed as income in India by the foreign entities of the group.
In response, BBC said in a statement on Friday that the I-T search operation has been completed and the organization will continue to cooperate with the authorities.
“Income tax authorities have left our offices in Delhi and Mumbai. We will continue to cooperate with the authorities and hope matters are resolved as soon as possible," said a BBC spokesperson.
The spokesperson also said the welfare of the organization’s supporting staff, some of whom faced lengthy questioning, and were required to stay overnight, was its priority.
“Our output is back to normal and we remain committed to serving our audiences in India and beyond... The BBC is a trusted, independent media organisation and we stand by our colleagues and journalists who will continue to report without fear or favour," he added.
The tax department also claimed in its statement that the media organization utilized the services of seconded employees 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. Further, the survey has also thrown up several discrepancies and inconsistencies with regard to transfer pricing documentation," said the department.
Transfer pricing refers to the valuation of intra-group transactions across borders and has often been the subject of dispute between tax authorities and multinational corporations.
Officers test the value of intra-group transactions of MNCs against industry benchmarks followed by unrelated parties to ensure that these are at arm’s length.
The department said it had exercised due care to record statements of only key personnel, and the survey operation was conducted in a manner so as to facilitate continued regular media and channel activity.
The survey by the tax department triggered a controversy, with several opposition politicians linking it to a documentary aired by BBC in the UK on the 2002 Gujarat riots, which was critical of Prime Minister Narendra Modi, the then chief minister of the state.
India’s information and broadcasting ministry disallowed sharing of links of the documentary on YouTube and Twitter.
A spokesperson for the ministry of external affairs on 19 January said the BBC documentary was a “propaganda piece designed to push a discredited narrative". “Lack of objectivity and continuing colonial mindset" was “blatantly visible" in the documentary, he said.
Emails sent to the Prime Minister’s Office seeking comments for the story remained unanswered at the time of publishing.
gireesh.p@livemint.com