Google under ED scanner for alleged Fema violations

Google, the US-based internet giant's Indian subsidiary Google India Private Limited is under the Enforcement Directorate (ED) scanner for alleged violations under the Foreign Exchange Management Act (Fema).

The ED suspects that the company is sending abroad the money earned from its India operations in violation of Fema.

Google, along with other social networking websites, is already embroiled in a controversy over objectionable content.

As far the alleged Fema violations are concerned, the company has already given a reply to ED for clarification sought from it by the investigating agency. After examining the reply, investigators will decide on the further action in the case.

"We are yet to receive the (ED) notice and thereby are unable to comment on the specific details. We have an obligation to our shareholders to set up a tax efficient structure and our present structure is compliant with the tax rules in all the countries where we operate," a Google spokesperson said.

The ED is specifically looking into the AdWords program under which any advertiser pays on the basis of clicks its advertisement gets on various internet services offered by Google. According to sources, investigators are looking into the company's transactions with two sister concerns — Google Ireland and Indoxon India and investments in another 'step down' subsidiary Viorchen Info India.

The ED also suspects invoice manipulation in exports to shift funds. The income tax department has also raised a tax demand of R12 crore on the company.