New Delhi: Moving quickly towards ending a retrospective tax dispute with a firm that gave India its largest oilfield, the government has accepted Cairn Energy PLC’s undertakings which would allow for the refund of taxes, sources said.
Meeting the requirements of the new legislation that scraps levy of retrospective taxation, the company had earlier this month given required undertakings indemnifying the Indian government against future claims as well as agreeing to drop any legal proceedings anywhere in the world.
The government has now accepted this and issued Cairn a so-called Form-II, committing to refund the tax collected to enforce the retrospective tax demand, two sources with direct knowledge of the development said.
Following the issuance of Form-II, Cairn will now start withdrawing all cases in international courts.
Once this is complete, the company will be issued a Rs 7,900 crore refund, they said, adding the withdrawal of cases may take up to three-four weeks.
While a Cairn spokesperson did not immediately respond to requests for comments, a senior finance ministry official confirmed the government accepting the company’s undertakings.

Press Trust of India