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Nanny tax scan on US

New Delhi, Dec. 31: US ambassador to India Nancy Powell today regretted the “circumstances” of Devyani Khobragade’s December 12 arrest in New York, making her first public statement on the incident.

But Indian officials indicated they could not view Powell’s expression of regret as sincere unless US prosecutors dropped the visa fraud charges against Khobragade, who is accused of paying her nanny much less than the sum purportedly promised in her visa application.

New Delhi, they said, is stepping up pressure on Washington to drop the charges by probing potential tax violations by the US embassy here when it bought tax-free tickets for nanny Sangeeta Richard’s family to secretly fly them out to New York on December 10.

“I join secretary Kerry in expressing our regret for the circumstances of the consular officer’s arrest, but we believe that we can look forward to continuing to expand our bilateral relations,” Powell said in a New Year’s Eve message.

US secretary of state John Kerry had phoned national security adviser Shivshankar Menon on December 18 to express “regret” at the manner in which US marshals arrested Khobragade, then India’s deputy consul-general in New York.

Both Powell and Kerry appear to be referring to Khobragade’s public arrest from outside her daughter’s school, and her subsequent strip search. But the US state department has rejected suggestions that it may nudge the prosecutors to drop the charges against Khobragade.

“They’re talking the talk, but they need to walk the talk for the standoff to head towards a resolution,” an Indian official said.

A team of diplomats and lawyers at India’s foreign office is probing whether the US embassy flouted Indian tax laws while buying tickets for Richard’s husband and children.

All foreign embassies in every nation are exempt from most domestic taxes under the Vienna Convention on Diplomatic Relations, but there’s a presumption that the pact would be used by diplomats and their families alone.

But evidence collated by the foreign ministry shows a credit card registered in the name of the US embassy was used to buy the Air India tickets for the Richards.