Government sends Cairn India Rs 204 billion tax demand

Cairn India said it has received a tax demand of Rs 204 billion rupees from the Indian tax office on Match 13 in relation to its 2007 listing. The demand comprises 102.48 billion rupees in outstanding tax and a similar amount in interest.

The tax demand comes just a few days after its former parent, Carin Energy Plc, was served a similar demand of about Rs 102 billion for the same listing. Carin Energy had sold its majority stake in Carin India to Vedanta, reducing it to about 10 percent in 2011.

Cairn India said in a statement to the stock exchanges that it did not agree with the demand and would pursue all possible options to protect its interest.

Recently, other multinational firms including Vodafone Group Plc, Royal Dutch Shell Plc IBM Corp and Microsoft Corp have been served similar notices by the tax department in India.

Britain’s Foreign Secretary Philip Hammond said Finance Minister Arun Jaitley explained that the Cairn Energy case was started by the previous government and that New Delhi was powerless to stop it.