Cairn Energy | Retrospective Tax Case
Cairn Energy withdraws all litigations against India in retrospective tax case
New Delhi/IBNS: Cairn Energy, now known as Capricorn energy, has withdrawn all cases in relation to retrospective taxes, allowing the Indian government to roll back the tax regimen and refund the taxes collected in this regard to the company, media reports said.
Cairn Energy “has entered into the final stage in its undertakings with the Government of India by withdrawing Indian and global appellate and enforcement proceedings,” the company said in a notice published in a newspaper on Wednesday, reported Economic Times.
“This action is the final necessary step by the company under the rules of India’s Taxation (Amendment Act) 2021,” the notice added.
The company will now file its ‘Form 3’ with the income tax department.
This would then result in the cancellation of the previous tax demand and refund of the taxes collected from the company in this regard, Cairn said.
Cairn filed cases in courts The Indian Government had earlier seized the company’s shares, dividends, including tax refunds to meet its tax demand.
The 2014 dispute had begun with the government seeking capital gains tax worth Rs 10,200 crore, excluding penalty and interest for reorganizing Capricorn’s assets within India in 2006 while preparing for an initial public offering (IPO) of Cairn India.
The company had sold a controlling stake in its Indian division to Vedanta in 2011 before getting its shares listed in 2007.
However, an international arbitration tribunal in an order asked India to give back $1.2 billion plus interest, but the funds weren't forthcoming.
Cairn confirmed in the newspaper notice that “any claims arising out of or relating to the relevant orders or any related award, judgment or court order, no longer subsist”. The company has also provided the government an indemnity against any claims brought against India or its affiliate.
Cairn had earlier said that it awaits Rs 7,900 crore in tax refunds.
The Indian Government had seized the company’s shares, dividends, including tax refunds to meet its 2016 tax demand.
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