ED initiates FEMA probe against BBC

The Enforcement Directorate has registered a FEMA case against BBC India for alleged foreign exchange violations.
Elaborating this, the official sources said that the action was taken to probe irregularities of foreign funding by BBC India, diversion of funds and violation of rules under FEMA or Foreign Exchange Management Act, 1999. The move comes in the wake of searches conducted by Income Tax at the offices of the British broadcaster in New Delhi and Mumbai in February this year. A deputy managing editor of the news company has deposed before the agency. The ED has called for documents and the recording of statements of some company executives under provisions of the FEMA or Foreign Exchange Management Act, the officials said. The probe is essentially looking at purported foreign direct investment (FDI) violations by the company, they said. On 14 February this year, the I-T department conducted survey operations at the London-headquartered broadcaster’s offices in Delhi and Mumbai as part of an investigation into alleged tax evasion. The survey went on for three days. The Central Board of Direct Taxes (CBDT), the administrative body for the I-T department, had then said the income and profits shown by various BBC group entities were “not commensurate” with the scale of their operations in India and tax has not been paid on certain remittances by its foreign entities. The BBC, after the tax survey, had said they will “continue to cooperate with the authorities and hope matters are resolved as soon as possible.” “The CBDT said the survey found that despite substantial consumption of content in various Indian languages (apart from English), the income/profits shown by various group entities (of BBC) is not commensurate with the scale of operations in India.” “…the department gathered several evidences 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,” the CBDT had said. The action had led to a sharp political debate with the ruling BJP accusing the BBC of “venomous reporting” while the Opposition questioned the timing — weeks after the broadcaster aired a two-part documentary, “India: The Modi Question”.