India’s Ministry of Finance has accused the BBC of tax evasion, saying that it had not fully declared its income and profits from its operations in the country.
Indian tax authorities ended three days of searches of the British broadcaster’s New Delhi and Mumbai offices on Thursday night.
Without naming the BBC, the Central Board of Direct Taxes said on Friday in its first official statement since completing the office inspections that its “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.”
“During the course of the survey, the Department gathered several evidences 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,” it said.
Critics of Prime Minister Narendra Modi have questioned the timing of the searches, which came after India reacted angrily to a documentary by the British broadcaster which focused on Prime Minister Narendra Modi’s leadership as chief minister of the western state of Gujarat during riots in 2002.
Reporters Without Borders, an international media watchdog, denounced the government’s action as “attempts to clamp down on independent media”.
“These raids have all the appearance of a reprisal against the BBC for releasing a documentary critical of Prime Minister Narendra Modi three weeks ago. They have come at a time when independent media are being hounded more and more, and when pluralism is shrinking in India due to increased media concentration,” the group said in a statement on Thursday.
A BBC spokesperson confirmed the tax officials had left the offices In New Delhi and Mumbai.
“We are supporting staff – some of whom have faced lengthy questioning or been required to stay overnight – and their welfare is our priority,” the spokesperson said.
“Our output is back to normal and we remain committed to serving our audiences in India and beyond.”
A government official denied accusations that the tax survey was “vindictive”, saying it was related to transfer pricing rules and alleged diversion of profits.
The Press Trust of India news agency cited unnamed officials as saying on Thursday that investigators collected financial data from select BBC staffers and made copies of electronic and paper data from the news organization.
It said the investigation was being carried out to investigate issues related to international taxation and transfer pricing of BBC subsidiary companies.
Critics questioned the timing of the searches, which came after BBC aired show critical of Prime Minister Narendra Modi.