SIS LIVE, the British company which had a Rs.245 crore contract with Prasar Bharati to produce the Commonwealth Games broadcast, has denied all allegations of tax evasion or financial impropriety.
The firm came under the Income Tax department's scanner after assessing officers allegedly found discrepancies in its financial documentation and suspected the company of trying to evade taxes to the tune of Rs.29 crore.
Prasar Bharati has reportedly been told to cut the taxes from the company's receipts.
Refuting the allegations, which it termed “groundless” and “outrageous,” SIS LIVE said it has paid all service tax due in accordance with the regulations. While the latest payment was made this month, the next payment is due in January 2011, according to a company spokesperson who responded to an email questionnaire from The Hindu.
“SIS LIVE has kept proper accounts and copies of bills. These are administered by our central service centre in the U.K. and operated online from India. Since the IT department visit to our project office in Delhi on October 5, we have provided all the documents requested — over 2,500 — within the agreed timescale,” the spokesperson said.
“At no time were any SIS LIVE offices ‘raided' or any of its bank accounts ‘frozen.' Currently, much more than 20 per cent of the contract value is outstanding, as was expected at this stage under the contract terms,” the spokesperson added.
The company also rejected accusations that it had formed a fly-by-night Indian arm with no expertise solely for the purpose of bidding for the Games, or that it had subcontracted activities in violation of its contract.
“Following the award of the CWG contract in October 2009, SIS and its subsidiary SIS Outside Broadcasts Limited formed a partnership under the name of SIS LIVE in January 2010 as a special purpose vehicle to deliver the CWG contract,” the spokesperson said, pointing out that SIS Outside Broadcasts had acquired the 70-year-old legacy of BBC Outside, and has had expertise at major sporting events including Wimbledon, Formula One and an earlier British edition of the Commonwealth Games.
“In order to deliver the highest quality broadcast services required for the CWG, SIS LIVE subcontracted numerous organisations from around the world,” the spokesperson said. “This is entirely normal practice for a project of this magnitude and complexity, and the use of subcontractors was expressly contemplated in the contract.”