BBC admits 'tax evasion' in India; underreported $4.8mn income: Report

Media giant British Broadcasting Corporation (BBC) has acknowledged it may have paid lower taxesin India, a report by Hindustan Times has claimed. Two officials from the Central Board of Direct Taxes (CBDT) said BBC paid lower taxes than itsactual liability, said the report.

The broadcaster, in an email to the tax department, confessed to underreporting of the detected income which amounts to 'tax evasion' for which it will have to face recovery as well as penalty. Around $4.8 million (Rs 40 crore) is believed to have been underreported by the British public broadcaster, funded by the UK government.

"BBC must act as per the stated procedure or face the law. The Department will continue to take action against it until the matter is taken to the logical conclusion," an official was quoted as saying by the publication.

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Despite making an informal confession, BBC will have to file a revised return for it to be taken seriously.

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Tax surveys carried out at BBC offices

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

At the time, theIT department reportedly "gathered several evidence" which indicated that tax had not been paid on certain remittances which have not been disclosed as income in India by the foreign entities of the group.

Central Board of Direct Taxes (CBDT) in a statement said at the time that the income and profits disclosed by BBC group entities in India were "not commensurate" keeping in mind the scale of their operations.

"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," it added.

ED registers a case

BBC and its financial activities havebeen put under the microscope since the turn of the year.In April,Enforcement Directorate registered a case against BBC foralleged foreign exchange violations.

The case was filed under the Foreign Exchange Management Act (FEMA). High-level employees of the organisation including one of the BBC India directors were interrogated by the law enforcement agency.

However, the broadcaster 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 started after the Godhra train burning where 59 Hindu pilgrims were burned to death.

(With inputs from agencies)

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