Cairn Energy closer to settling India tax dispute
The dispute goes back to 2012
Cairn Energy has moved close to settling its long-running tax dispute with the Indian government after the New Delhi parliament voted to scrap a retrospective law.
The Edinburgh-based oil and gas company’s claim against the Indian government stems from a 2012 law which was used two years later by the authorities to claim unpaid taxes from Cairn India’s 2006 corporate reorganisation.
Cairn pursued a legal action against the Indian government which led to an arbitration tribunal in December ruling in its favour.
The Indian government appealed against the verdict on grounds of sovereignty and tax avoidance by Cairn Energy..
However, the Indian government has now presented a bill in the Lok Sabha lower house of parliament to withdraw all retrospective tax demands on Cairn and said it will refund the funds collected to enforce such levies.
Cairn, which estimated the value of the arbitral award at $1.7 billion, said in a statement: “We have noted the introduction to the Indian parliament of the Taxation Laws (Amendment) Bill 2021, which proposes certain amendments to the retrospective taxation measures that were introduced by the Finance Act 2012.
“We are monitoring the situation and will provide a further update in due course.”