The government on Monday said it has framed the model Bilateral Investment Treaty (BIT) to minimise Cairn Energy type of dispute which has resulted in demand for compensation of $5.6 billion from India. The government has received dispute notices from investors on the BITs signed on the basis of old model text of 1993, Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Lok Sabha.
Cairn Energy Plc and Cairn UK Holdings Ltd have initiated international arbitration under India-UK Bilateral Investment Protection and Promotion Agreement (BIPA), wherein it has sought $5.6 billion in compensation from India, she said. Arbitrators have been appointed and the proceedings have initiated, she added. “In order to minimise such investor related disputes in future, the government has recently revised its model BIT text which aims at providing investor protection within the overall framework of laws and policies regulating foreign investment in India keeping in mind the interests of the nation,” the minister said.
The revised model BIT will form the basis of negotiation for future BITs, Sitharaman said, adding that in “the new model BIT, taxation matters have been excluded keeping in view of the fact that taxation is an integral function of the state’s sovereignty and hence such matters need not be escalated under treaty dispute settlement mechanism”. She also said there is no evidence to suggest that export promotions have been affected by such litigations.
Meanwhile, tax refunds of Rs 14,332 crore have been issued this year till August 5, the Finance Ministry said. “The Central Processing Centre (CPC) Bengaluru has already issued over 54.35 lakh refunds totaling to Rs 14,332 crore which includes 20.81 lakh refunds for AY 2016-17 (current year returns) totaling to Rs 2,922 crore till August 5, 2016,” the ministry said in a release.
The ministry said that over 75 lakh taxpayers availed the facility of e-verification of IT returns this year till August 5 against around 33 lakh taxpayers last year till September 7.