India Tomorrow
NEW DELHI—Three weeks after a two-part documentary was released by BBC that was critical of Modi, BBC offices in Delhi and Mumbai were raided by operatives from the Income Tax Department. IT department, however, did not call it a raid but a “survey”, an exercise that the IT department conducts as a routine.
The documentary was, however, blocked by the Modi government. It was telecast only in the UK. Many students at several places in India were booked to screen the documentary on YouTube.
The documentary pertained to the role of Prime Minister Narendra Modi in anti-Muslim violence in February-March 2002 when he was chief minister of Gujarat. But BJP leaders say that the raids have nothing to do with the documentary.
Reports say that the operatives also seized documents and mobile phones from many employees.
BBC, in a statement, confirmed the raid.
It said the survey was conducted allegedly “in view of the BBC’s deliberate non-compliance with the Transfer Pricing Rules and its vast diversion of profits.”
(Under Transfer Pricing, a company sells or transfers its goods or services at a low profit from a high-tax country to another affiliate in a tax haven country that offers foreign businesses and individuals minimum or no tax liability for their bank deposits. And the affiliate would then sell the products to an independent company at a high price that would be subject to no or very little tax. Companies and individuals use tax havens legally to stash money to hide money from tax authorities in countries where the tax rate is high, like India. But this results in revenue loss and a drain on the foreign exchange reserves of the country where the goods or services were produced.)
According to reports, BBC had been diverting its profits. “The key focus of these surveys is to look into the manipulation of prices for unauthorized benefits, including tax advantages. Unfortunately, these surveys have been undertaken due to BBC’s persistent non-compliance with the norms, making it a repeat offender,” India.Com quoted from a statement released by BBC. BBC’s statements, according to India.Com, are based on notices issued to it by the IT department.
According to India.Com, BBC, in this case, has been “non-compliant under transfer pricing rules; persistent and deliberately violative of transfer pricing norms; deliberately diverted a significant amount of the profits and have not followed the arm’s length arrangement. Arm’s length management means transactions between parties that act independently of one other and have no relationship with each other, resulting in the fair market value of the product or services. Accordingly, the surveys have been conducted to investigate BBC’s violation of the Transfer Pricing Rules and its diversion of profits.
The raids have drawn criticism from Opposition leaders and independent journalists.
Condemning the raids, Congress leader Jairam Ramesh said that the Opposing demanded a Joint Parliamentary Committee probe into the Adani scam. But the government, instead, conducted raids at BBC offices.
India’s top journalist body, the Editors Guild of India, said, “EGI is deeply concerned about the IT “surveys” being carried out at the offices of BBC India. Is distressed by the continuing trend of government agencies being used to intimidate and harass news organizations critical of the ruling establishment.”
Congress MP K C Venugopal tweeted, “The IT raid at BBC’s offices reeks of desperation and shows that the Modi government is scared of criticism. We condemn these intimidation tactics in the harshest terms. This undemocratic and dictatorial attitude cannot go on any longer.”
Press Club of India, country’s biggest media club, also condemned the raid strongly. In a statement, the PCI said , “The Press Club is deeply concerned that the government’s action on an international broadcasting network will damage the reputation and image of India as the world’s largest democracy. We urge the govt to restrain its agencies from misusing their powers to intimidate the media.”
Senior journalist Saba Naqvi said in a tweet, “The raids on #BBC offices in India only reinforce the narrative of the 2-part BBC documentary! Just recognize that, folks.”
