New Delhi : Hit hard by the retrospective tax, Cairn Energy plc of UK has offered to pay 15 % of the Rs 10,247 crore principal amount in return for government lifting freeze on the 9.8 % shares it holds in its erstwhile subsidiary, Cairn India.
Cairn has written to the Finance Ministry saying it wants to avail of latest offer by CBDT of staying outstanding disputed demand on payment of 15 % till such time that the case is disposed of, sources privy to the development told PTI.
The Income-Tax Department had in January 2014 slapped a draft assessment order of Rs 10,247 crore tax on alleged capital gains Cairn made on 2006 reorganisation of its India business. Pending that, it froze 9.8 % shareholding it was left with in Cairn India, its erstwhile subsidiary which it sold to Vedanta Group in 2011.
In February this year, the Income Tax Department issued a final a tax demand notice of over Rs 29,000 crore, including Rs 18,800 crore in back dated interest.
Sources said Cairn Energy wants to pay Rs 1,537 crore (15 % of principal amount of Rs 10,247 crore) during the pendency of the arbitration it has initiated against the demand.
In return, it wants the stay on Cairn India shares to be lifted. It holds 18.41 crore shares of Cairn India which at Wednesday’s closing price of Rs 135.25 are worth Rs 2485.69 crore.
Cairn may be looking at disposing of these shares to fund its business plans. The company is however not keen on Finance Minister Arun Jaitley’s offer in his Budget for 2016-17 to waive interest and penalty if the companies paid the principal amount to settle the retrospective tax disputes.
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