NEW DELHI: After days of assessment, Britain’s Cairn Energy said on Wednesday it had entered into a tax refund deal with the Indian government, which would allow the company to get its refund worth Rs 7,900 crore while it will end all the pending disputes with the government.
In a statement, the company said it has “entered into undertakings with the government of India in order to participate in the scheme introduced by recent Indian legislation, the Taxation Laws (Amendment) Bill 2021, allowing the refund of taxes previously collected from Cairn in India.
This will mean the company will get refund of Rs 7,900 crore. “Subject to certain conditions, the Taxation Amendment Act nullifies the tax assessment originally levied against Cairn in January 2016 and orders the refund of Rs 7,900 crore (approximately $ 1.06bn), which was collected from Cairn in respect of that assessment. In order to satisfy those conditions, Cairn will commence the filing of the necessary documentation under rule 11UF(3) of the Indian Income Tax Rules 1962 (Rules) intimating the withdrawal, termination and/or discontinuance of various enforcement actions,” Cairn said.
In exchange, the UK-based company will drop litigations seeking seizure of India’s assets in countries ranging from France to the UK and has given undertakings indemnifying the Indian government against future claims as well as agreeing to drop any legal proceedings anywhere in the world.