Britain’s Cairn Energy said on Wednesday it had entered into certain undertakings with the Indian government which would allow for the refund of taxes under a long-running billion dollar dispute with the South Asian country.
The Indian government’s recent amendment to taxation laws nullifies the tax assessment originally levied against Cairn in January 2016 and orders the refund of ₹7,900 crore which was collected from Cairn in respect of that assessment.
Cairn said it is working collaboratively with the Indian government towards expediting the refund within the process of the Tax Amendment Act Rules. The previously announced special dividend is expected to be paid by early 2022.
The union government has recently notified ground rules for settling 17 tax disputes with multinational companies like Cairn Energy and Vodafone that involved use of an anti-abuse provision introduced in tax laws in 2012 on past transactions.
The oil and gas producer had said in September it was considering entering into statutory undertakings with the Indian government after changes to a retrospective tax law which is at the heart of the row.
Cairn said it will commence the filing of the necessary documentation intimating the withdrawal, termination of various enforcement actions.
The union government’s amendment rules are the result of a public consultation by the government, and elaborate on the conditions added to the Income Tax Act earlier this year, by way of an amendment, to settle these cases.
Never miss a story! Stay connected and informed with Mint.
Download
our App Now!!
