By Somya Panwar
On Friday, the Enforcement Directorate(ED) imposed a penalty of Rs 3.44crore on BBC India for alleged foreign exchange violation after two years of initiating the case against the broadcaster under Foreign Exchange Management Act (FEMA). The three directors were also imposed with a fine of Rs 1.14 crore each by ED.
A BBC spokesperson told PTI that BBC is committed to function within the rules of the country they are based in, India included. He also mentioned that the adjudication order is not yet received by BBC World Service (WS) or its directors and they will very carefully review and consider their next appropriate step once they receive the order.
After the Income Tax Department in February, 2023, conducted a survey at BBC’s Delhi office, an investigation was launched and ED issued a notice against BBC WS India, its directors and the finance head. The recent penalty imposed on BBC is a followed action of the issued notice. ED cited multiple contraventions of FEMA regulation in the notice resulting in the further detailed investigation.
As per Press Note 4 that was issued in September 2019 under the Government’s approval by the Department for Promotion of Industry and Internal Trade (DPIIT), according to Indian regulations 26 percent of cap is mandated for digital media entities. According to PTI’s sources, BBC was running the business with 100 percent of full foreign ownership despite the Indian regulations.
Giles Antony Hunt, Indu Shekhar Sinha and Paul Michael Gibbons- The three directors of BBC WS India have been fined with Rs 1,14,82,950 each for failing to comply with the regulations and operating the business during the alleged period of violation. Along with that total penalty of Rs 3, 44, 48, 850, a fine of Rs 5000 will be fined per day from October 15, 2021 until the broadcaster meets the compliance.
The Central Board of Direct Taxes (CBDT) had also reported certain remittances not being taxed properly by the company, stating the income and profits reports were not commensurate in India as per their scale of operations.
The BBC in response to the case has expressed its commitment to function within the rules set by India and to comply with the order after the Income Tax action. They are looking forward to resolving the matter at earliest.