(T.E.T)
Cairn NSE 0.81 % Energy, renamed Capricorn Energy last month, has withdrawn all litigations in the retrospective tax case, which will allow the Government of India to nullify previous tax demand and refund the taxes collected in this regard to the company.
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. “This action is the final necessary step by the company under the rules of India’s Taxation (Amendment Act) 2021.”
The company will now file its ‘Form 3’ with the income tax department. This would then result in the scrapping of the previous tax demand and refund of the taxes collected from the company in this regard, Cairn said.
Cairn had gone to courts in several countries last year to enforce an arbitral award it had won against India in December 2020 in the retrospective tax case. The arbitration tribunal had ordered India to pay $1.2 billion plus interest and cost to the UK firm.
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 previously said it expected to receive a refund of Rs 7,900 crore. The government had seized Cairn’s shares, dividends, and tax refunds to meet its tax demand originally made in January 2016 ..
The government had demanded Cairn pay a capital gains tax of Rs 10,200 crore plus interest and penalty for a reorganization of assets that the company undertook at its India unit in 2006, ahead of the listing of its shares in 2007.
