09/11/23

TAX EVASION: BBC admits committing tax evasion, flouting foreign exchanges to Indian financial agencies

As published on: organiser.org, Wednesday 9 November, 2023.

One of the most internationally renowned news broadcasting agencies, the British Broadcasting Corporation (BBC) has confessed to the Indian tax department that it abstained in paying lower taxes than liabilities which ultimately led it to fall prey to the Enforcement Directorate (ED), the economic crime intelligence entity of the country.

Media giant BBC (British Broadcasting Corporation) has acknowledged that it may have paid lower taxes in India according to a report by an Indian media agency. Two officials from the Central Board of Direct Taxes (CBDT) said that the BBC paid lower taxes than its actual liability, said the report.

Confession by Broadcaster

In an e-mail to athe tax department, the broadcaster confessed to under-reporting of the detected income which amounts to tax evasion for which it has to face penalty as well as recovery. Around 4.8 m (Rs 40 crores) is believed to have been under-reported by the BBC, funded by the UK government. Despite making an informal confession, the BBC will have to file a revised return for it to be taken seriously. “BBC must act as per the stated procedure or face law. The Department will continue to act against it until the matter is taken to the logical conclusion, an official was quoted as saying by the publication.

Tax Surveys carried out at BBC Offices

The Development comes months after the tax surveys were carried out at numerous BBC offices in Delhi and Mumbai by the Income Tax Department in February 2023. 

At the time, the IT Department reportedly gathered several evidences which indicated that the tax had not been paid on certain remittances which has not been disclosed as income in India by the foreign entities of the group.

In a statement, the Centra Board of Direct Taxes (CBDT) said at the time incomes and profits disclosed by the BBC group entities in India keeping in mind the scale of operations. "The survey operations also revealed that services of seconded employees have been utilized for reimbursement has been made by the Indian entity to the foreign entity concerned it added. 

Case by the Enforcement Directorate BBC and its financial activities have been put under the microscope since the turn of the year. In April 2023, the Enforcement Directorate (ED) registered a case against the BBC for foreign exchange violations and it was filed under the Foreign Exchange Management Act (FEMA). High level employees of the organisation including one of the directors from the broadcasting corporation was interrogated by the law enforcement agency (ED). 

However, the British Broadcasting Corporation (BBC) attempted to paint a picture that the government had launched a vendetta campaign after it aired a controversial documentary on the 2002 Gujarat Riots which stared after the Godhra train burning wherein 59 Hindu pilgrims were charred and burned to death.

Tags

Tax evasion BBC India Financial crime