The Enforcement Directorate (ED) on Thursday launched a FEMA (foreign exchange management act) probe against the British Broadcasting Corporation (BBC) to look at the violation of foreign direct investment (FDI) law and has started summoning key people at its India office, people familiar with the development said.
At least six executives of the BBC have already been called to the ED office in the last two weeks to record their statement and the company has been asked to submit certain documents related to its finances.
ED’s probe is based on the findings of the Income Tax department, which had carried out a survey action at BBC offices in Delhi and Mumbai in February this year.
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The survey revealed that income or the profits shown by BBC’s various entities “is not commensurate with the scale of operations in India” and evidence has emerged which indicates “the company has not paid taxes on certain remittances”, the Central Board of Direct Taxes (CBDT) said in a statement in February.
Besides, IT sleuths had found several discrepancies in the transfer pricing documentation of the BBC.
“The survey revealed that despite substantial consumption of content in various Indian languages (apart from English), the income/profits shown by various group entities is not commensurate with the scale of operations in India,” the CBDT stated then.
HT has reached out to the BBC for a comment on the ED probe.
A BBC spokesperson had said in February that the company will continue to cooperate with the authorities and hope matters are resolved as soon as possible.
“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,” BBC said in February.
According to the IT probe, evidence has been gathered pertaining to the operation of the organisation during the survey, which indicates 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 survey operations also revealed that services of seconded employees have been utilized 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,” CBDT statement said.
