UK-headquartered broadcaster BBC has indicated that the process to end tax dispute with Indian Income Tax Department will take time. Meanwhile, various reports suggest the broadcaster appears to have admitted paying lower tax.

In an e-mail response, a BBC spokesperson said: “The BBC is cooperating fully with the Indian tax authorities’ enquiries, and will continue to do so. The process is ongoing and will take time to conclude.”  The spokesperson also added that the BBC takes tax obligations very seriously. The Income Tax Department did not respond to the queries sent by businessline.

In February, the Income Tax Department, without naming the organisation, said it carried out survey operations in Delhi and Mumbai “at the business premises of group entities of a prominent international media company at Delhi and Mumbai”.  The 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.

Also read: Aware of BBC raid, cannot offer any judgement: US

During the course of the survey, the department gathered several evidences pertaining to the operation of the organisation, which indicated that tax had not been paid on certain remittances which have not been disclosed as income in India by the foreign entities of the group. The survey operations also revealed that services of seconded employees have been utilised for which reimbursement has been made by the Indian entity to the foreign entity concerned. Such remittance was also liable to be subject to withholding tax which has not been done.

According to the department, the survey also threw up several discrepancies and inconsistencies with regard to Transfer Pricing documentation. Such discrepancies relate to level of relevant Function, Asset and Risk (FAR) analysis, incorrect use of comparables which are applicable to determine the correct Arms Length Price (ALP) and inadequate revenue apportionment, among others. The survey operation has resulted in unearthing of crucial evidences by way of statement of employees, digital evidences and documents which will be further examined in due course, the department said.