With senior Cairn Energy executives all set to call on finance ministry officials this week, it is being speculated that the British energy company may let go off the remaining amount of the arbitration award if India pays the principal amount due, ET reported citing sources. The thaw comes in the backdrop of Parliament passing a tax amendment nullifying the retrospective clause.
Cairn Energy, which won $1.2 billion in an arbitration award against India, is looking to settle the dispute and could meet the officials possibly as early as Wednesday, the report stated citing people with knowledge of the matter. The company says the amount is now $1.7 billion.
The Taxation Laws (Amendment) Bill 2021 allows the government to withdraw tax demands and settle cases by paying the principal tax collected under the clause. This is subject to the appellant withdrawing all cases. The government will not pay any interest or penalty imposed under any international tribunal.
Earlier too, Cairn Energy had offered to settle the dispute if the Indian government was willing to pay the principal amount due.
Finance Secretary T. V. Somanathan said a total of Rs 8,100 crore was collected using the retrospective tax legislation. Of this, Rs 7,900 crore was from Cairn Energy alone. This money will be repaid.
