1 min read.Updated: 06 Jan 2022, 01:01 AM ISTLivemint
Capricorn Energy Plc., formerly Cairn Energy Plc., said it has entered the final stage in the undertaking with India
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NEW DELHI :
Capricorn Energy PLC., formerly Cairn Energy Plc., said on Wednesday it has entered the last leg of the settlement of a controversial tax dispute by withdrawing all lawsuits against the Indian government, which will pave the way for the authorities to refund ₹7,900 crore or approximately $1.06 billion to the British explorer.
Capricorn and Cairn UK Holdings Ltd. said in a newspaper announcement that they have entered into the final stage in the undertaking with Indian government “by withdrawing Indian and global appellate and enforcement proceedings." This action is the final necessary step by the company under the rules of India’s Taxation (Amendment Act) 2021, the announcement said.
The companies will now file the necessary form with the Income Tax department which will allow the government to proceed to the final stage. “This will result in the Taxation Amendment Act nullifying the tax assessment originally levied against the company in January 2016 and the government of India ordering the refund of the taxes collected from the company in respect of that assessment," said the announcement.
Capricorn also confirmed that it shall forever irrevocably forgo any reliance on any right and provisions under any award it has secured. In 2020, an arbitral tribunal had granted an award in favour of Cairn asking India to pay $1232.8 million plus interest and $22.38 million towards arbitration and legal costs.
India is trying to put an end to 17 long-drawn disputes over taxation of offshore sale of Indian assets. The settlement scheme seeks to nullify the tax demands raised or confirmed before 28 May 2012 by applying an anti-abuse provision introduced the Income Tax Act in 2012 during the previous United Progressive Alliance (UPA) government. There is unanimity among the government and the opposition leaders about the need for settling these cases.