Cairn Energy Says India Raised Its Tax Bill
March 15 2016 - 12:03PM
Dow Jones News
By Rajesh Roy
NEW DELHI--Cairn Energy PLC says Indian tax authorities have
rebilled it for $4.4 billion in back taxes and interest despite New
Delhi's pledge to make the country's tax system more
predictable.
In its financial results for last year released Tuesday, Cairn
U.K. Holdings Ltd. said it received a new tax demand from Indian
authorities in recent months that increased its declared liability
by more than $1 billion.
In his budget speech last month, Indian Finance Minister Arun
Jaitely reiterated the government's intention of providing a stable
and predictable tax regime. He offered a one-time waiver of
interest and penalties if companies settled their outstanding
disputes.
A year ago, the tax authorities said Cairn India failed to pay
withholding taxes on gains made by its former parent Cairn Energy
in a share transfer. Cairn Energy said it doesn't owe the money
because it transferred shares internally as part of a group
restructuring to prepare for the public listing of Cairn India's
shares in 2007.
"We have commenced international arbitration proceedings under
the U.K. India Bilateral Investment Treaty to settle the dispute,"
said David Nisbet, director of corporate affairs at Cairn Energy
PLC, in an email Tuesday.
The latest tax demand includes $1.6 billion in principal and
$2.8 billion in interest, according to Cairn Energy.
An Indian finance ministry spokesman declined to comment.
Write to Rajesh Roy at rajesh.roy@wsj.com
(END) Dow Jones Newswires
March 15, 2016 11:48 ET (15:48 GMT)
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