Income Tax Department’s ‘survey’ at BBC offices ends after 3 days
The income-tax department had conducted marathon survey operations at the offices of the BBC in the national capital and Mumbai that ended on Thursday late evening. The survey had triggered a bitter war of words between the ruling BJP and the opposition parties. 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 tax department said the survey operations also showed 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.” Further, the survey has also thrown up several discrepancies and inconsistencies with regard to Transfer Pricing documentation, the statement from the tax department said without naming BBC.
It said such discrepancies relate to level of relevant Function, Asset and Risk (FAR) analysis, incorrect use of comparables that are applicable to determine the correct Arms Length Price (ALP) and inadequate revenue apportionment, among others. It made it clear 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.
Income Tax ‘survey’ operations at BBC offices continues for third day
“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. Despite such stance of the group, the survey operation was conducted in a manner so as to facilitate continued regular media/channel activity,” the statement added. Throughout the operations, tax department officials had reiterated that it was a “survey” operation and not a raid saying the department was following laid down rules. The BBC, in its statement on Thursday, had reiterated that it will continue to cooperate with the authorities and hoped the issue is resolved soon. It also said that it will continue to stand by colleagues and journalists who, it said, will continue to report without fear or favour. The IT survey of the BBC offices had come weeks after a massive controversy over a documentary by the British state-funded broadcaster on the 2002 Gujarat riots.
The ministry of external affairs had termed the documentary as “a propaganda piece designed to push a particular discredited narrative”. The Centre had asked YouTube and Twitter to block videos of the BBC documentary.
The tax department said the survey operations also showed that services of seconded employees have been utilised for which reimbursement has been made by the Indian entity to the foreign entity concerned