I-T detects 'discrepancies' in BBC’s tax filings in India
NEW DELHI: The 3-day survey undertaken by the Income Tax department on the premises of British Broadcasting Corporation (BBC) allegedly revealed 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 income tax authorities had carried out a three-day-long survey at the BBC offices in India. The "survey" concluded on Thursday evening.
“The survey revealed that despite substantial consumption of content in various Indian languages (apart from English), the income and profits shown by various group entities is not commensurate with the scale of operations in India,” said Surabhi Ahluwalia Commissioner of Income Tax, Media and Technical Policy, in a statement, without naming the British broadcaster.
“The survey has also thrown up several discrepancies and inconsistencies with regard to Transfer Pricing documentation. Such discrepancies relate to the 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,” Ahluwalia said.
She further added that the survey operation has resulted in the unearthing of crucial evidence by way of statements of employees, digital evidence, and documents which will be further examined in due course.
During the course of the survey, Ahluwalia said, “the Department gathered several pieces of evidence pertaining to the operation of the organization 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”
“It is pertinent to state that statements of only those employees were recorded whose role was crucial including those connected to, primarily, finance, content development and other production related functions,” she said.
“Even though the Department exercised due care to record statements of only key personnel, it was observed that dilatory tactics were employed including in the context of producing documents/agreements sought” she alleged adding “Despite such stance of the group, the survey operation was conducted in a manner so as to facilitate continued regular media/channel activity.”
The survey operations also 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,” the IT department asserted.
The "survey" was launched on February 14 at BBC offices in Delhi and Mumbai and it ended after about 60 hours on Thursday night.
Meanwhile, BBC in a statement issued on Thursday late, evening, after the IT survey ended, said, “We will continue to cooperate with the authorities and hope matters are resolved as soon as possible.:
"We are supporting staff - some of whom have faced lengthy questioning or been required to stay overnight - and their welfare is our priority. Our output is back to normal and we remain committed to serving our audiences in India and beyond,” the broadcaster said adding "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."