BBC World Service India is reportedly rejigging its shareholding in a bid to comply with the Indian government's foreign direct investment (FDI) guidelines. In a regulatory filing, BBC World Service India said that the broadcaster had received a letter from the Ministry of Information and Broadcasting on March 31 that stated it had not followed the FDI norms.
The company said it has sought time until March 31, 2024, for compliance, and communicated its restructuring proposals to the Indian government.
BBC News deputy chief executive Jonathan Munro will make an announcement regarding the change in the ownership structure soon, The Economic Times reported. He is scheduled to address a townhall of BBC India staff on Tuesday. BBC World Service India is a service provider to the parent BBC UK and provides content for its television, radio and website in English, Hindi, and other Indian regional languages.
In February this year, the Income Tax officials conducted raids at the BBC offices in Delhi and Mumbai, citing multiple irregularities, including non-payment of taxes on certain remittances that were not disclosed as income in India.
The Income-Tax Department had then said that the income/profits shown by various group entities were not commensurate with the scale of operations in India.
“During the course of the survey, the I-T Department gathered several pieces of evidence about the operation of the organisation which indicate that tax has not been paid on certain remittances which have not been disclosed as income in India by the foreign entities of the group,” the agency had said.
Earlier, the tax department had flagged distribution revenue earned by BBC World Distribution Ltd, as chargeable to tax as royalty, along with determining whether it has a Permanent Establishment (PE) in India. In December 2022, the Delhi Bench of the Income Tax Appellate Tribunal ruled that the distribution revenue received by the company from distribution of BBC World News Channel in India, is “not in the nature of royalty”.
It had also said that such revenue, which had already been offered to tax by the Indian entity, BBC World India, and that “no part of such income can again be attributed to the assessee notionally and taxed in India” and hence, asked for deletion of such addition by the tax authorities for 2007-08 and 2008-09 assessment years.
Following this, the Enforcement Directorate (ED) launched an inquiry into alleged foreign exchange rule violations by the BBC.
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