A Cairn do attitude!
The Permanent Court of Arbitration at the ICJ ruled against the Indian Government for applying retrospective tax obligations on Cairn Energy. The Government has been ordered to pay damages worth ₹8,000cr ($1.2bn). This comes within three months of a similar judgement in Vodafone’s case.
The Government had introduced an amendment to the Union Budget Bill of 2012 which allowed levying taxes on capital gains from foreign companies which gain value from assets based in India. After the initiation of arbitration, the Government sold 5% out of the 9.8% stake Cairn held in Vedanta.
The ICJ said that the retrospective tax emerged as a fiscal measure and was not exactly a tax dispute thereby violating the India-UK Bilateral Investment Treaty.
The Government has challenged the Vodafone ruling. Who will emerge victorious remains a curious question.
To know more, head to the link below.
Last week, a French court allowed Cairn to seize 20 Indian state assets worth more than €20m ($23.63m) in Paris.This was part of the $1.7bn tax row between the Scottish company and the Indian Government.
And it shows no signs of subsiding.But why would Cairn go to the extreme of seizing Government property?
What is the company's - and the Government's - endgame here?Click link for a deep-dive into the Cairn-India saga:https://transfin.in/why-is-cairn-energy-seizing-indian-government-properties-in-paris
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