BBC India: What is a tax ‘survey’ and what do they mean for British broadcaster?

The BBC’s offices in India were searched by the country’s tax authorities for the third day in a row on Thursday.

India’s federal authorities say they are probing the British broadcasting giant’s business operations in Delhi and Mumbai amid allegations of tax evasion.

The Indian Express newspaper reported that the searches – described as “surveys” by India’s tax officials – were part of a probe into “deliberate non-compliance with transfer pricing rules” and the BBC’s alleged “vast diversion of profits”.

Transfer pricing refers to pricing of transactions between different entities of one organisation.

The Press Trust of India cited unnamed officials as saying that investigators collected financial data from select BBC staffers and made copies of electronic and paper data from the news organisation’s premises.

Rights groups and opposition parties, however, have for some time accused the government of using such “surveys” as a form of harassment and intimidation towards its critics, including NGOs and media organisations.

The raids at BBC offices come just a few weeks after the broadcaster released India: The Modi Question, a documentary series critical of the Indian prime minister Narendra Modi and his role in the Gujarat riots in 2002, when he was the state’s chief minister.

The documentary was broadcast only in the UK. India’s government dubbed the series “propaganda” and acted to block screenings in the country, as well as ordering social media companies to remove clips of the series by invoking emergency powers.

What is a tax ‘survey’?

If an entity chooses not to disclose any income or asset, the Indian tax department has the power to “search” or “survey” that entity, two different terms which carry with them different powers. Such activities are often described collectively as tax department “raids”, though this term is not mentioned in the country’s Income Tax Act.

According to tax laws, a “survey” is a less aggressive form of examination by tax officials.

A survey is less invasive or intrusive and gives limited powers to officers, according to advocate Deepak Joshi, who wrote about the context of tax “surveys” in news portal The Wire.

Usually, surveys are conducted to identify a taxpayer who has not properly filed income tax returns despite having taxable income. They can be in the form of a surprise visit and inspection and officials can collect information relevant to the case.

How is a tax ‘survey’ different from a ‘search’?

In a search, tax officials have concrete proof or confirmed information against a suspected person or company.

Mr Joshi pointed out that, during a search, “more draconian powers” are used. Tax officials can “search”, “break open” and “seize” any document, asset or material in such cases.

Can tax agents seize phones during a survey?

There have been reports that tax officials confiscated the phones and laptops of some BBC journalists during the “surveys”. Employees were also reportedly stopped from leaving the office premises on the first day of the raid on Tuesday.

According to the income tax laws, during a survey, only books of accounts and documents can be impounded – once sufficient reason is established for doing so.

Laptops and mobile phones cannot be confiscated during a survey. But a copy of data from laptops and any digital devices can be taken, according to the law.

Experts said any seizure of laptops and mobile phones is contrary to what the law prescribes.

Tax officials can only “seize” mobile phones and/or laptops or any other digital devices if it is an income tax search and not a survey.

How India’s authorities ‘misuse’ tax searches to punish critics

For critics of the Modi administration, the focus on BBC India’s offices has not come as a surprise. They have often called into question the timing of tax searches, which they say are often deployed by the government as a means to either silence or send a message to critics.

In 2021, the federal government searched the offices of independent online news organisations NewsClick and Newslaundry.

Vernacular daily Dainik Bhaskar came under the government’s scanner in 2021 after it published scathing reports against the handling of the Covid pandemic and published reports of mass funeral pyres and floating corpses.

Broadcaster NDTV, considered to be a liberal channel, was targeted in 2017. The government said it was probing cases of loan defaults against the channel.

Critics take on ‘surveys, not searches’

At a press conference on Tuesday, Mr Modi’s ruling Bharatiya Janata Party (BJP) defended the raids and said tax authorities should be allowed to do their work. “The BBC indulges in anti-India propaganda,” BJP spokesperson Gaurav Bhatia said.

Meenakshi Ganguly, the South Asia director of Human Rights Watch, told G20 leaders to urge Mr Modi’s government to respect free speech.

“Officials said they were conducting ‘surveys, not searches’ to investigate allegations of tax evasion. However, they sealed off the offices for the duration of the raid and reportedly seized the documents and phones of several journalists,” she said.

“Modi has called the G20 an opportunity for the world to know India, ‘the mother of democracy, with its diversity and courage’. These words ring hollow when weighed against the government’s actions. World leaders, including members of the G20, should press India to meet its pledges in international meetings on human rights, including to protect the right of people to exercise peaceful dissent.”

The Editors Guild of India also called it a “continuation of a trend of using government agencies to intimidate and harass press organisations that are critical of government policies or the ruling establishment”.

Opposition party members have also hit out at the government for the apparent act of retribution.

Amnesty International called the “surveys” an “affront to free speech”.

“These raids are a blatant affront to freedom of expression. The Indian authorities are clearly trying to harass and intimidate the BBC over its critical coverage of the ruling Bharatiya Janata Party,” it said in a statement.

“The overbroad powers of the Income Tax Department are repeatedly being weaponised to silence dissent. Last year, tax officials also raided the offices of a number of NGOs, including Oxfam India. These intimidatory acts, which undermine the right to freedom of expression in India, must end now.”

With no clear end point to the so-called surveys, from Wednesday all BBC India employees except those essential to its broadcast TV operation were instructed to work from home until further notice.