New Delhi: With India is in process of filing an appeal against international arbitration award in the Cairn's retrospective tax case, it seems the troubles for Cairn India may mount further as the Centre believes that Cairn had set up a tax-abusive structure and did not pay taxes anywhere in the world on the gains that it made in India.
According to the sources in the know of the matter, the government is not averse to going for a settlement of the tax disputes within the existing legal framework as in the said case, it was well within India's sovereign powers to redress the situation of double non-taxation and tax abuse. The government is also confident that if enforcement proceedings are initiated, India will strongly defend its interests.
Cairn is talking to the government and is yet to respond to the discussions.
However, Cairn Energy had moved courts in nine countries to enforce its $1.4 billion arbitral awards against India, which the company won after a dispute with the country's revenue authority over a retroactively applied capital gains tax.
As per sources known to the matter, of these, the December 21 award from a three-member tribunal at the Permanent Court of Arbitration in the Netherlands has been recognised and confirmed by courts in the US, the UK, Netherlands, Canada and France. Cairn has started the process to register the award in Singapore, Japan, the United Arab Emirates and Cayman Islands, they said.