I-T Dept passes order to recover retrospective tax from Cairn Energy
Jun 19, 2017, 17:54 IST
The Income Tax Department has passed a coercive action order against the British oil firm Cairn Energy Plc, so that it can recover retrospective tax worth Rs 10,247 crore.
Cairn has challenge the move in front of an international arbitration panel but lost.
The I-T department has now ordered that USD 104 million dividends due to it be taken away from its remaining 9.8% stake in its former subsidiary Cairn India (which is now called Vedanta Ltd). Other than this, the department has said that Cairn owes another Rs 1,500 crore of tax refund to the department.
Cairn Energy has challenged the move in front of an international arbitration panel last week, but lost after the panel decided not to entertain a plea by seeking injunction against the coercive action to recover the tax.
"On June 16, 2017 the Indian Income Tax Department (IITD) issued an order to Vedanta India Ltd (VIL) directing it to pay over any sums due to Cairn. Sums due to Cairn from VIL now total USD 104 million, including historical dividends of USD 53 million and a further dividend of USD 51 million after the merger of CIL and VIL," said a statement from Cairn.
However, the company has added that it will continue with the international arbitration proceedings against the demand of the retrospective tax.
"Cairn is seeking full restitution for (UK-India Bilateral Investment Treaty) Treaty breaches resulting from the expropriation of its investments in India in 2014, the attempts to enforce retrospective tax measures and the failure to treat the Company and its investments fairly and equitably," it said.
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Cairn has challenge the move in front of an international arbitration panel but lost.
The I-T department has now ordered that USD 104 million dividends due to it be taken away from its remaining 9.8% stake in its former subsidiary Cairn India (which is now called Vedanta Ltd). Other than this, the department has said that Cairn owes another Rs 1,500 crore of tax refund to the department.
Cairn Energy has challenged the move in front of an international arbitration panel last week, but lost after the panel decided not to entertain a plea by seeking injunction against the coercive action to recover the tax.
"On June 16, 2017 the Indian Income Tax Department (IITD) issued an order to Vedanta India Ltd (VIL) directing it to pay over any sums due to Cairn. Sums due to Cairn from VIL now total USD 104 million, including historical dividends of USD 53 million and a further dividend of USD 51 million after the merger of CIL and VIL," said a statement from Cairn.
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However, the company has added that it will continue with the international arbitration proceedings against the demand of the retrospective tax.
"Cairn is seeking full restitution for (UK-India Bilateral Investment Treaty) Treaty breaches resulting from the expropriation of its investments in India in 2014, the attempts to enforce retrospective tax measures and the failure to treat the Company and its investments fairly and equitably," it said.