Tax department slaps fresh demand note of Rs 10,247 crore on Cairn Energy


Tax department slaps fresh demand note of Rs 10,247 crore on Cairn Energy

Within weeks of tax tribunal ITAT upholding levy of retrospective tax, the Income Tax Department has slapped a fresh demand note of Rs 10,247 crore on British explorer Cairn Energy Plc.ITAT in its March 9 order held that Cairn Energy was liable to pay tax on the 2006 transfer of India assets to newly created Cairn India, prior to its listing. It, however, held that interest cannot be charged on it as the demand was raised using retrospective tax legislation.The Income Tax Department had raised a tax demand of Rs 10,247 crore and another Rs 18,800 crore in interest for 10 years.”Following the ruling of the ITAT, an amended tax demand, received on March 31, 2017 noted that late payment interest would now be charged from February 2016, i.e. from 30 days following the date of the original 2016 final assessment order,” the company said.The decision of the ITAT is potentially subject to appeal, the company added. In 2011, Cairn Energy sold its stake in Cairn India to Vedanta but retained just about 10 per cent. In 2014, Cairn Energy received an order from tax authorities restricting it from selling its residual 10 per cent shares in locally-listed Cairn India, valued at $1billion then, pending a review of an internal group reorganisation carried out in 2006, the company said. Read more

Credits: economictimes.indiatimes.com

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