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Guess who’s hiding Rs 100 crore tax

PBCL, the state-run company that owns Doordarshan and All India Radio, lied about its income and did not pay taxes of about Rs 100 crore tax, according to the central government’s Service Tax department. Manish Tiwari reports.

business Updated: May 23, 2009 23:58 IST
Manish Tiwari

The advertisements ran for months on Doordarshan and All India Radio – asking citizens to pay up their taxes on time and live with dignity and honour.

But some in the management were seemingly not watching.

The Prasar Bharati Broadcasting Corporation Limited (PBCL) – the state-run company that owns Doordarshan and All India Radio – lied about its income and did not pay taxes of about Rs 100 crore tax, according to the central government’s Service Tax department.

After scrutinising five-year records, the Delhi Tax Commissionerate served a show cause notice on the corporation early this week and directed it to pay the entire tax, or else it would take legal action.

After the case came to light, the corporation paid an initial sum of Rs 10 crore as service tax on May 8.

We have an issue with the service tax department. While some tax has been paid, an exercise is on to negotiate the balance tax amount," Prasar Bharati Chief Executive Officer B.S. Lalli told the Hindustan Times.

If tax is due, we’ll have to pay it in accordance with law,” he added.

Prasar Bharati’s income comes mainly from advertisements, sponsored programmes, and private customers like TV channels who rent out its infrastructure like towers, studios and dish television platforms.

It also makes money from broadcasting programmes for ministries like agriculture, health, rural development and human
resource department, and professional and consultancy services.

“It appears Prasar Bharati intentionally and willfully suppressed the facts and did not pay the service tax as applicable,” said a senior department official, declining to be named as he is not authorised to talk to the media.
“We have launched the process to recover the balance tax amount.”

The scrutiny found that the corporation had suppressed facts about its total income from 2003-4 to 2007-8, evading around Rs 87.10 crore in taxes.

While it received a total income of about Rs 4,277 crore, it disclosed a total taxable value of only Rs 3,445 crore – suppressing information about Rs 831 crore in income, according to Service Tax officials.

They said they also found the corporation had separately evaded more than Rs 10 crore in taxes, and launched investigations, the official said.