ED registers Foreign Exchange violation case against BBC India

New Delhi: After investigating the alleged tax evasion, the Enforcement Directorate has registered a case for foreign exchange violations under the Foreign Exchange Management Act (FEMA) against the British Broadcasting Corporation (BBC) India.

The Income-Tax Department held raids at the premises of the BBC in New Delhi, and Mumbai in February over the alleged “non-compliance” with transfer pricing rules and diversion of profits.

The action against the BBC came a month after the broadcaster aired a documentary that implicated Prime Minister Narendra Modi in violence against Muslims after the Godhra incidents in Gujarat in 2002.

According to the Central Board of Direct Taxes (CBDT), which oversees the Income Tax department, the income and profits declared by different entities of the BBC group in India did not correspond to the extent of their operations in the country. The CBDT also alleged that the broadcaster had not paid tax on certain remittances made by its foreign entities.

The BBC deliberately diverted a significant amount of profits, and did not follow the arm’s length arrangement in the case of allocation of profit, the department claimed.

In January, the Indian tax department initiated action against the British Broadcasting Corporation (BBC) a few weeks after it released a documentary called "India: The Modi Question," which focused on the 2002 Gujarat riots.

On January 20, the Indian government directed YouTube and Twitter to remove links to the documentary, stating that it had the potential to harm the country's friendly relations with foreign nations and impact public order within India. The authorities alleged that the documentary undermined India's sovereignty and integrity.