Delhi: UK Foreign Secretary James Cleverly raised the issue of tax searches in BBC offices with External Affairs Minister S. Jaishankar during a bilateral meeting Wednesday.
He was firmly told that all entities operating in India must fully comply with relevant laws and regulations, according to sources.
Cleverly is in Delhi to attend a meeting of all G20 foreign chiefs at the Rashtrapati Bhavan on Thursday. This will be the second ministerial meeting held under India’s G20 presidency.
Tax authorities conducted days-long searches at the BBC’s Delhi and Mumbai offices last month, and checked documents and devices.
The searches came after the government reacted angrily to a documentary made by the British broadcaster about Prime Minister Narendra Modi’s leadership of Gujarat during the riots in 2002.
The government last month dismissed the documentary, “India: The Modi Question”, and blocked its streaming and sharing on social media.
The foreign ministry said the British broadcaster’s documentary was meant to push a “discredited narrative”, was biased, lacked objectivity and showed a “continuing colonial mindset”.
In the middle of February, officers of the Income Tax Department carried out the tax “survey” to probe irregularities in “transfer pricing” and “international taxation” by the company.
An accounting practice, transfer pricing shows – as part of a larger exercise — the price that one unit or division in a company charges another division for goods and services provided, including salaries of their employees.
Transfer pricing can lead to tax savings for a corporation, which may be contested by tax authorities as evasion.
A source had told ThePrint: “It is suspected that the BBC did not comply with the Transfer Pricing Rules and got unauthorised tax advantages. It is also suspected that they diverted profits.”
He added the BBC was earlier sent notices to explain the suspected violations but they were “non-responsive”.
Also read: BBC does not have an ‘agenda’, says chief to staff in India after I-T survey