NEW DELHI :
Capricorn Power PLC., previously Cairn Power Plc., mentioned on Thursday it has acquired $1.06 billion in tax refund from the Indian authorities after the corporate withdrew its regulation fits looking for to implement a beneficial arbitration award in a controversial tax dispute.
“Capricorn is happy to substantiate that the anticipated Indian tax refund of Rs79 billion has now been paid and web proceeds of $1.06 billion have been acquired,” the corporate mentioned in a press release.
The British power main additionally mentioned {that a} round is predicted to be issued in early March detailing the shareholder resolutions required in reference to the corporate’s proposed shareholder return of as much as US$700 million. This includes $500 million tender supply and $200 million ongoing share repurchase programme, the corporate mentioned.
The tax refund is made underneath India’s Taxation (Modification Act) 2021 which sought to finish all of the disputes arising from a retrospective modification to the Revenue Tax Act made in 2012. The tax refund is made after nullifying the tax evaluation initially levied in opposition to the corporate in January 2016 underneath the 2012 modification.
The settlement of the tax dispute meant that Capricorn forgoes its rights underneath a 2020 arbitral tribunal award in its favour asking India to pay $1232.8 million plus curiosity and $22.38 million in the direction of arbitration and authorized prices.
Specialists described the settlement of the case inside six months of bringing in a authorized framework for resolving these circumstances a constructive improvement. “Contemplating the covid pandemic, the complexities concerned and the approvals wanted, settling the dispute in about six months is a constructive improvement,” mentioned Amit Maheshwari, tax associate at AKM World, tax and consulting agency.
This is likely one of the 17 long-drawn disputes over taxation of offshore sale of Indian property that the federal government is attempting to settle. The settlement scheme seeks to nullify the tax calls for raised or confirmed earlier than 28 Might 2012 by making use of an anti-abuse provision launched the Revenue Tax Act in 2012 throughout the earlier United Progressive Alliance (UPA) authorities. There’s unanimity among the many authorities and the opposition leaders concerning the want for settling these circumstances.
Supply: Live Mint