Cairn Energy issued further notices from India tax authorities

3rd Apr 2014 07:35

Cairn Energy said it has been issued two further notices from the Indian Income Tax department for information regarding transactions by its subsidiary, Cairn UK Holdings, amid a tax probe by the country's authorities.The tax department has requested a return for the year ended March 31st 2007 and the group said it intends to file a nil return on the grounds that "none of the transactions undertaken by it during that fiscal year is chargeable to tax in India". A second notice claimed that the business should have withheld tax on dividends paid to its parent company."Neither Cairn nor CUHL has been asked to file any return in respect of this notice and Cairn intends to respond to the notice refuting this claim," the oil and gas explorer said."Throughout its history of operating in India, Cairn has been compliant with the tax legislation in force in each year. Cairn has stated that it intends to take whatever steps are necessary to protect the Company's interests." Cairn's tax bill for 2007 came under investigation by the tax authorities after completing a £980m initial public offering of its former subsidiary in India, now controlled by Vedanta.As a result, Cairn has been restricted by the Indian tax department from selling the remaining 10.3% stake in Cairn India, valued at $1bn at December 31st 2013.RD