Retro tax: Cairn withdraws lawsuits in US, UK; process on in France, Netherland
PremiumCairn on November 26 had withdrawn the lawsuits filed against the Indian government in Mauritius, Singapore, the UK and Canada
British energy major Cairn Energy Plc has finally withdrawn the lawsuits filed against the Indian government and its entities overseas in a ₹10,247 crore retrospective tax case. The company is in the process of dropping cases filed in France and the Netherland, too. These lawsuits were filed to seize assets of Air India to recover the money from the Indian government.
Cairn on November 26 had withdrawn the lawsuits filed against the Indian government in Mauritius, Singapore, the UK and Canada, sources told news agency PTI.
The Cairn's decision to drop the lawsuits comes after an international arbitration award overturned the levy of ₹10,247 crore retro tax by India and directed it to refund the money to the company.
On December 15, Cairn also dropped the lawsuits filed in New York and Washington courts. The company is in final stages of withdrawing the lawsuit in the French court, the news agency said.
After the attachments of some Indian government flats in Paris, the India government in July had scrapped a 2012 amendment to the Income Tax Act, which empowered taxmen to impose capital gains levies if there was a change in ownership with an overseas entity, even as its business assets were in India.
The 2012 legislation was used to levy a cumulative of ₹1.10 lakh crore of tax on 17 entities, including Vodafone, but substantial punitive action was taken only in the case of Cairn.
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The Taxation Laws (Amendment) Bill, 2021, enacted in August scraps the tax rule that gave the tax department power to go 50 years back and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India.
The government in November had issued Cairn a so-called Form-II, committing to refund the tax collected to enforce the retrospective tax demand.
With agency inputs
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