Government prepares appeal in Cairn Energy tax case
Cairn Energy Plc’s CEO Simon Thomson will meet senior Indian officials on Thursday to discuss a tax dispute, even as India prepares to appeal a $1.2 billion arbitral award the British company recently won.
At the meeting, finance secretary Ajay Bhushan Pandey will listen to the company’s proposals even as the government prepares to file the appeal in a Dutch court, three people familiar with the developments said, requesting anonymity.
The only concession India is willing to offer Cairn is to settle the dispute through its Vivad se Vishwas scheme, under which the government will waive interest and penalty on the principal tax demand, one of the people said. The dispute relates to a retrospective amendment of tax rules in 2012, which gave the government the authority to tax M&A transactions dating back to 1962 if the underlying asset was in India. While the current administration has chosen not to open fresh retrospective tax demands, it has continued to pursue old cases, including those against Cairn Energy and Vodafone Group Plc.
