Cairn Energy wins retro tax arbitration case; experts weigh in
In September it was Vodafone and today (Dec 23) it is Cairn Energy. The Indian government has lost two tax arbitration awards in the last 3 months. Both these cases are a fallout of the controversial retrospective tax amendment made to the tax laws in 2011. CNBC-TV18 learns that the arbitration tribunal has ruled that India's tax demands in lieu of Cairn were a breach of fair treatment under the bilateral investment protection pact with the UK. Experts discussed this in an interview with CNBC-TV18.
In September it was Vodafone and today (Dec 23) it is Cairn Energy. The Indian government has lost two tax arbitration awards in the last 3 months. Both these cases are a fallout of the controversial retrospective tax amendment made to the tax laws in 2011. CNBC-TV18 learns that the arbitration tribunal has ruled that India's tax demands in lieu of Cairn were a breach of fair treatment under the bilateral investment protection pact with the UK.
A quick background to the case - Cairn Energy received a notice in 2014 from the tax department over an internal group restructuring it had carried out in 2006 while gearing up for the IPO of Cairn India. Later, in 2015, the tax department sought over Rs 10,000 crore on alleged capital gains made by the company due to the internal reorganisation. Cairn Energy contested the claim and took the case for an international arbitration that has now gone in its favour now.
Senior Advocate Arvind Datar, Counsel for Cairn Energy in the arbitration case, Anuradha Dutt, Founder at DMD Advocates, also the Counsel for Vodafone in the retrospective taxation case and tax expert Dinesh Kanabar, Founder and CEO of Dhruva Advisors discussed this.
For entire discussion, watch the video
(Edited by : Abhishek Jha)
First Published: Dec 23, 2020 6:42 PM IST
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