ED urges I-T dept,Reserve Bank to probe Google India’s forex violations

The Enforcement Directorate has decided to probe Google India

Written by Shruti Srivastava | New Delhi | Published:February 27, 2012 1:25 am

The Enforcement Directorate (ED) has decided to probe Google India further and has suggested that Reserve Bank of India (RBI) and the Income-Tax department investigate the company’s alleged forex violations.

Official sources told The Indian Express that Google India Private Ltd (GIPL),a wholly-owned subsidiary of Google Inc,US,issued 9,00,295 shares to its parent company even after the expiry of the approval of the Foreign Investment Promotion Board (FIPB). The approval in 2004 was for two years with the condition that the company file a collaboration agreement with the RBI or inform it about remittances within 30 days.

However,Google India issued shares between January 30,2008 and July 7,2008,two years after the expiry of FIPB approval without conforming to the central bank’s directive.

Sources said that the response received from GIPL has not been satisfactory and the company maintained “they have adopted automatic route for establishment of subsidiary in India and hence no government approval is required”.

The investigating agency has also alleged that the company has outstanding dues for customs duty worth Rs 163.36 crore for more than three years against the import of fixed assets.

The sources alleged it manipulated invoice in exports to shift the funds so that the I-T department raises tax demand of only Rs 12 crore. When contacted,a Google spokesperson said: “We are unable to comment on this matter,since we have not yet received the notice.”

Earlier during the month,the ED,after reviewing the data from RBI,started probing internet search giants Google and Yahoo! for possible violations of the Foreign Exchange Management Act (FEMA),and whether Google had illegally transferred and received investments from abroad,including Ireland. It also issued a notice to the internet giant seeking necessary documents.

These companies along with other social networking sites are already under fire in India from the government and courts regarding the monitoring of offensive content posted by users.

The alleged violations of Foreign Exchange Management Act by the company are under Schedule I of the Act.

Google Search

Between January30,2008 and July 7,2008,Google India issued shares two years after the expiry of FIPB approval without conforming to the central bank’s directive

Earlier during the month,the ED started probing Google and Yahoo! for possible violations of FEMA,and if Google had illegally transferred and received investments from abroad

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