Cairn India employees work at a storage facility for crude oil. (HT Archive)
Cairn India employees work at a storage facility for crude oil. (HT Archive)

Cairn Energy hopeful of solution in tax tussle with Centre

Cairn Energy said the two parties have discussed “a number of proposals with the aim of finding a swift resolution that could be mutually acceptable to the Government of India and the interests of Cairn’s shareholders”
By Rajeev Jayaswal
UPDATED ON FEB 22, 2021 11:44 AM IST

After three rounds of discussions on the $1.2 billion retrospective tax litigation last week, the government and UK-based Cairn Energy PLC have expressed hope to settle the matter amicably outside the court through legally available mechanisms such as the tax amnesty scheme “Vivad se Vishwas” [from dispute to trust], two people with direct knowledge of the matter said on Sunday.

In a statement on Sunday, Cairn Energy said the two parties have discussed “a number of proposals with the aim of finding a swift resolution that could be mutually acceptable to the Government of India and the interests of Cairn’s shareholders”. The statement came after finance secretary Ajay Bhushan Pandey and Cairn Energy chief executive Simon Thomson discussed the matter on Thursday, Friday and Saturday. Pandey is leading an inter-ministerial team holding discussions with the visiting Cairn delegates led by Thomson.

Also Read | Govt to challenge Cairn Energy’s case in courts

One of the people mentioned above said discussions have progressed in the right direction so far. “The government is hopeful about a mutually acceptable solution soon within the legal framework, and Vivad se Vishwas is the legal framework,” he said on condition of anonymity. HT first wrote about it on February 16.

“Another meeting cannot be ruled out as both parties [the government and Cairn] are willing to resolve the dispute as soon as possible,” he added.

Cairn said its discussions with the officials of India’s finance ministry were “cordial and constructive” “notwithstanding and without prejudice” to the company’s rights under the international arbitration award.

“Assuming such a resolution can be achieved, we look forward to being able to move on to further opportunities to invest in India which continues to import the majority of energy sources it consumes,” it said in the statement.

“We remain hopeful that an acceptable solution can be found, in order to avoid further prolonging and exacerbating this negative issue for all parties. However, we have also been clear that we must continue to take all necessary steps to protect the interests of our shareholders,” Cairn said.

A finance ministry spokesperson did not respond to HT’s queries.

The first person quoted above said this litigation is a legacy issue inherited by the National Democratic Alliance (NDA) government. “The government [incumbent] is in principle against any retrospective tax. But, it is also committed to act as per the law of the land. The I-T [Income Tax] Act was amended retrospectively, and companies [Cairn and Vodafone] challenged it on the basis of bilateral investment treaties, which would have far reaching consequences. No treaty could challenge the sovereign right to tax. Hence, the government has no option to challenge such arbitration awards, unless withdrawn,” he said. The government has already appealed against the arbitration award in the case of Vodafone, and has time till next month on the Cairn matter, he added.

India is involved in two legal battles over retrospective taxation – one with Vodafone Group PLC and another with Cairn. On September 25, 2020, an international arbitration tribunal in The Hague ruled that the Indian government’s decision to retrospectively amend the Income Tax Act, 1961 in the 2012-13 budget was not consistent with an investment treaty signed between India and the Netherlands.

Another arbitration tribunal, constituted under the agreement between the UK and India for the promotion and protection of investments, on December 21, 2020 ruled in favour of Cairn on similar grounds. Earlier this month, Cairn moved a US district court to enforce the arbitration award.

The retrospective amendment of the Income Tax Act in 2012 was applied to Cairn, when it was exiting from its subsidiary Cairn India Ltd in January 2014. The Act was amended retrospectively during the tenure of then finance minister Pranab Mukherjee after the Supreme Court ruled in favour of Vodafone on a 11,000 crore tax dispute with the government.

Abhishek A Rastogi, partner at law firm Khaitan & Company, said: “The GoI’s proposal to resolve the tax dispute under the ongoing ‘Vivad se Vishwas’ scheme is a pragmatic solution to end the litigation quickly and settle the matter amicably. Any other approach would prolong the litigation.”

SHARE THIS ARTICLE ON
Close
Eighteen rounds of borrowings have been completed so far starting from October 23, 2020.(PTI)
Eighteen rounds of borrowings have been completed so far starting from October 23, 2020.(PTI)

Centre releases 1.04 lakh crore GST compensation shortfall to states

PTI, New Delhi
PUBLISHED ON MAR 01, 2021 08:37 PM IST
The ministry on Monday released the 18th weekly instalment of 4,000 crore to 23 states and 3 Union territories with Legislative Assembly (Delhi, Jammu & Kashmir and Puducherry).
Close
The minister said not only this, the electronic toll collection is set to boost royalty by 10,000 crore per annum.
The minister said not only this, the electronic toll collection is set to boost royalty by 10,000 crore per annum.

Mandatory FASTag to help save 20k crore per annum on fuel: Nitin Gadkari

PTI, New Delhi
PUBLISHED ON MAR 01, 2021 07:26 PM IST
To improve green plantation cover beside highways, e-tagging of plants will be done, Gadkari added.
Close
Officials said that by sponsoring advertisement boards in front of mobile shops, companies have violated advertisement rules.(Shankar narayan/ HT Photo)
Officials said that by sponsoring advertisement boards in front of mobile shops, companies have violated advertisement rules.(Shankar narayan/ HT Photo)

Mobile retailers write to PM Modi for Amazon probe

Reuters, New Delhi
PUBLISHED ON MAR 01, 2021 06:46 PM IST
AIMRA urged the government to "suspend all Amazon activities in India" until there is an investigation into the company's practices.
Close
The collection is, however, lower than the record <span class='webrupee'>₹</span>1,19,875 crore collected in the previous month.
The collection is, however, lower than the record 1,19,875 crore collected in the previous month.

GST collections rise 7 pc to 1.13 lakh crore in February

PTI, New Delhi
PUBLISHED ON MAR 01, 2021 06:11 PM IST
The gross GST revenue collected in February 2021 is 1,13,143 crore, of which CGST is 21,092 crore, SGST is 27,273 crore, IGST is 55,253 crore (including 24,382 crore collected on import of goods) and Cess is 9,525 crore (including 660 crore collected on import of goods).
Close
Representational image. (Bloomberg)
Representational image. (Bloomberg)

A taper tantrum around 2024 polls could be Modi govt’s biggest economic trial

By Roshan Kishore, Hindustan Times, New Delhi
UPDATED ON MAR 01, 2021 06:17 PM IST
While most of the economic analysis around the pandemic’s impact on the Indian economy has focused on domestic factors, there is merit in looking at the impact of a near-certain economic disruption to the Indian economy in the next few years
Close
As per the government, the objective of this auction is to obtain a market determined price of all the spectrum blocks.(Mint)
As per the government, the objective of this auction is to obtain a market determined price of all the spectrum blocks.(Mint)

Spectrum auction begins, 5G not included: All you need to know about bidding

By hindustantimes.com | Written by Deepali Sharma, Hindustan Times, New Delhi
UPDATED ON MAR 01, 2021 04:14 PM IST
Here is what all you need to know about the much-awaited auction.
Close
Petrol and diesel prices vary from state to state, due to various taxes levied by the central government and the state government concerned.(HT Photo)
Petrol and diesel prices vary from state to state, due to various taxes levied by the central government and the state government concerned.(HT Photo)

Gasoline sales record slowest growth in six months, diesel sales falls 5.3%

Reuters
PUBLISHED ON MAR 01, 2021 04:02 PM IST
Gasoline and gasoil prices in India have risen to record highs, mirroring global markets. Taxes account for about 61% of retail gasoline prices and about 56% of diesel prices.
Close
The dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.22 per cent to 91.07.(REUTERS)
The dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.22 per cent to 91.07.(REUTERS)

Rupee slips 8 paise to settle at 73.55 against US dollar

PTI, Mumbai
PUBLISHED ON MAR 01, 2021 03:56 PM IST
At the interbank forex market, the local unit opened at 73.76 against the greenback and witnessed an intra-day high of 73.19 and a low of 73.76.
Close
While traversing its journey from 549 to 50,000, the Sensex, up 91 times, has delivered 13.6% CAGR (compounded annual growth rate) returns in the last 35 years, say analysts.mint(MINT_PRINT)
While traversing its journey from 549 to 50,000, the Sensex, up 91 times, has delivered 13.6% CAGR (compounded annual growth rate) returns in the last 35 years, say analysts.mint(MINT_PRINT)

Sensex surges 750 points to end trading at 49,850; Nifty closes above 14,750

PTI, Mumbai
UPDATED ON MAR 01, 2021 04:06 PM IST
  • Meanwhile, the global oil benchmark Brent crude was trading 0.88 per cent lower at USD 65.39 per barrel.
Close
Bitcoin trading volumes are around $10 billion daily for the spot and futures market combined, compared with an equivalent figure of $100 billion for gold.(REUTERS)
Bitcoin trading volumes are around $10 billion daily for the spot and futures market combined, compared with an equivalent figure of $100 billion for gold.(REUTERS)

Bitcoin rises after Chinese region declares war on crypto mining

Bloomberg
PUBLISHED ON MAR 01, 2021 03:46 PM IST
  • Chinese officials first outlined proposals in 2018 to discourage crypto-mining
Close
A petrol pump employee wearing a face mask while attending to a customer in Trinagar, New Delhi.(Sanchit Khanna/HT File Photo)
A petrol pump employee wearing a face mask while attending to a customer in Trinagar, New Delhi.(Sanchit Khanna/HT File Photo)

India’s biggest oil retailers are focusing on rural revival

Bloomberg
PUBLISHED ON MAR 01, 2021 03:30 PM IST
  • The increasing economic importance of India’s hinterlands is influencing business expansion plans and accelerating a trend of more service stations being opened in the countryside.
Close
Prime Minister Narendra Modi. (ANI)
Prime Minister Narendra Modi. (ANI)

Contract farming will increase farm incomes, says PM Modi

By HT Correspondent | Edited by Zara Khan
PUBLISHED ON MAR 01, 2021 02:17 PM IST
The webinar, which was attended by agriculture minister Narendra Singh Tomar, focussed on effective implementation of budgetary allocations with regard to the agriculture and farmers’ welfare ministry
Close
Representational image. (AFP)
Representational image. (AFP)

Power sector: 7 more states implement reforms, earn more borrowing capacity

By Rajeev Jayaswal
PUBLISHED ON MAR 01, 2021 01:59 PM IST
On May 17, 2020, the Union government had raised states’ borrowing limit by 2% of GSDP for 2020-21, but 1% of the additional borrowing limit was available on implementation of four reforms with a 0.25% value each
Close
Delivery persons transporting LPG gas cylinders in a rickshaw cart in Patna (Parwaz Khan/HT Photo )
Delivery persons transporting LPG gas cylinders in a rickshaw cart in Patna (Parwaz Khan/HT Photo )

LPG cylinder prices hiked for fourth time in a month. Check latest rates here

By hindustantimes.com | Written by Kanishka Sarkar, Hindustan Times, New Delhi
UPDATED ON MAR 01, 2021 01:44 PM IST
The rates were earlier revised by 25 on February 4, 50 on February 15 and then again by 25 on February 25.
Close
The logo of Amazon is seen at the company logistics centre in Boves, France, (Reuters)
The logo of Amazon is seen at the company logistics centre in Boves, France, (Reuters)

Amazon quiz: Answer these 5 questions and win 10k Amazon Pay balance

By hindustantimes.com | Edited by Mallika Soni
UPDATED ON MAR 01, 2021 01:20 PM IST
The quiz began at 8am and will end at 12pm on Monday after which the winner list will be declared.
Close
SHARE
Story Saved
OPEN APP