“BBC did not pay tax on certain remittances”
New Delhi: The Income-tax survey of the British Broadcasting Corporation (BBC) revealed the income and profits shown by various group entities of the BBC were not commensurate with the scale of operations in India, the Ministry of Finance stated here today.
The Ministry claimed that during the course of the survey, the Income-tax 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.
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.
Further, the survey also threw 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,” the Ministry stated.
The survey operation, the Ministry further claimed, resulted in the unearthing of crucial pieces of evidence by way of statements of employees, digital evidence and documents which will be further examined in due course.
The Ministry claimed 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.
“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 Ministry claimed.
It may be mentioned that the Income Tax Department had carried out survey operations under section 133A of the Income-tax Act, 1961, at the business premises of BBC’s group entities in Delhi and Mumbai on February 14-15, 2023.
BBC is engaged in the business of development of content in English, Hindi and various other Indian languages; advertisement sales and market support services.
– global bihari bureau