The Enforcement Directorate has initiated an inquiry into the British Broadcasting Corporation (BBC) India under the Foreign Exchange Management Act (FEMA) for suspected violations.
It is learnt that the agency has also asked some BBC India functionaries to submit the documents which it has to scrutinise as part of the proceedings. On Thursday, one functionary appeared before the investigators.
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The move came about two months after the Income-Tax Department had surveyed the Delhi and Mumbai office of the BBC in February, which allegedly revealed multiple irregularities, including non-payment of tax on certain remittances that were not disclosed to the authorities as income in India.
The surveys were carried out weeks after the BBC had released a two-part documentaryIndia: the Modi Question, related to the 2002 riots and situation of the minorities in India. The Income-Tax Department had then said that the the income/profits shown by various group entities was not commensurate with the scale of operations in India.
“During the course of the survey, the Department gathered several evidence pertaining to the operation of the organisation 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,” said the agency had said.
As alleged by the Department, services of seconded employees (staff internally transferred on a temporary basis) had been used, for which reimbursement was made by the Indian entity to the foreign entity concerned. “Such remittance was also liable to be subject to ‘withholding tax’ [the amount employer deducts from the employee’s salary and pays to the government as the individual’s tax liability], which has not been done...the survey has also thrown up several discrepancies and inconsistencies with regard to Transfer Pricing documentation,” it had said.
