Breaking: BBC admits Tax Evasion in India; Underreported Rs.40 Crore Income and paying Lower Taxes in India

Media giant British Broadcasting Corporation (BBC) has acknowledged it may have paid lower taxes in India, a report by Media House has claimed. Two Official from Central Board of Direct Taxes (CBDT) stated that BBC paid less taxes than its real tax liability.

In an email to the tax department, the broadcaster admitted to underreporting the found revenue, which amounted to ‘tax evasion’ for which it will face recovery as well as penalties. The British public broadcaster, financed by the UK government, is thought to have underreported $4.8 million (Rs 40 crore).

“BBC must follow the stated procedure or face legal consequences. The Department will continue to take action against it until the matter is resolved logically,” an official was cited in the magazine as saying.

Despite an informal admission, BBC will need to file an updated return in order to be regarded seriously.

Tax Searches carried out at BBC Offices

The news comes months after the Income Tax Department conducted tax inspections at BBC offices in Delhi and Mumbai in February.

At the time, the IT department purportedly “gathered several evidence” indicating that tax had not been paid on some payments not disclosed as revenue in India by the group’s foreign subsidiaries.

In a statement at the time, the Central Board of Direct Taxes (CBDT) stated that the income and profits declared by BBC group firms in India were “not commensurate” given the extent of their operations.

“The survey operations also revealed that services of seconded employees were used, for which the Indian entity reimbursed the foreign entity concerned,” it added.

Case Registered by ED

Since the beginning of the year, the BBC and its financial operations have been scrutinised. The Enforcement Directorate filed a complaint against BBC in April for alleged foreign exchange crimes.

The complaint was filed in accordance with the Foreign Exchange Management Act (FEMA). The law enforcement agency examined high-level personnel of the corporation, including one of the BBC India directors.

However, the broadcaster sought to build an image of the government launching a revenge campaign after airing a contentious documentary on the 2002 Gujarat riots, which began after the Godhra train fire, which killed 59 Hindu pilgrims.