Retro tax law: What were the liabilities of Vodafone, Cairn Energy
NEW DELHI: The government’s proposal to scrap retrospective taxes is said to have a direct bearing on long-running tax disputes with Cairn Energy Plc and Vodafone Group.
It also proposed to nullify tax on indirect transfer of Indian assets before May 2012, on fulfillment of specified conditions, and repay the principle amount without interest thereon.
The proposed amendment comes after a French tribunal last month ordered a freeze on some 20 centrally located properties belonging to the Indian government as part of a guarantee of the amount owed to Cairn.
While the Centre’s liability in the Vodafone case is not too significant, it has to refund $1.2 billion to Cairn Energy for the shares of the company it had sold, tax refund withheld and dividends confiscated.
