(Alliance News) - Cairn Energy PLC on Wednesday said recently introduced legislation will clear the way for it to receive a INR79 billion, about USD1.06 billion, tax refund from the government of India following the
The Edinburgh-based oil and gas explorer and developer said the taxation amendment act nullifies the tax assessment originally levied against the company by India in January 2016 and orders the refund of funds collected from Cairn in respect of that assessment.
The company noted, however, that the scheme is subject to some conditions. In order to satisfy them, Cairn said it will now start the filing of the necessary documentation.
"Cairn is working collaboratively with the government of India towards expediting the refund within the process of the tax amendment act rules," Cairn said in its statement Wednesday.
The FTSE 250 company has been involved in a long-running battle with India which stemmed from a 2012 law. In 2014, Indian tax authorities used the new legislation to claim unpaid taxes from Cairn India's 2006 corporate reorganisation.
In response, Cairn commenced arbitration proceedings against the Indian government. It received a favourable ruling at the end of 2020, but has since struggled to extract the damages it was due.
Cairn on Wednesday also noted that its previously announced special dividend is expected to be paid by early 2022. Cairn in September had said the return would be made up of a USD500 million special dividend and USD200 million in share buybacks.
Cairn shares were trading 1.6% higher in London on Wednesday at 192.40 pence each. The stock is up 53% since the start of August.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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