Cairn arbitration outcome may impact Govt stand in Vodafone retrospective tax case

The Centre is likely to wait for the outcome of an arbitration initiated against it for levy of over Rs 10,000 crore retrospective tax on Cairn Energy before finalising its stand on a similar tax dispute case with Vodafone Group where a international arbitration court has ruled against it in favour of the telecom company.

The arbitration order on the tax dispute between the Indian government and Cairn Energy is expected over next few days. Sources said that the order will have bearing on the course of action the government takes on its disputes over retrospective taxation with various entities in Vodafone Group.

If the arbitration order goes against the government in the Cairn Energy case, it will have to pay more than Rs 7,500 crore to the energy company as the amount that it has ceased by denying Cairn its shares of dividend and income tax department liquidating portion residual shares that the company had in Cairn India post its merger with Vedanta.

Sources said that the government wants to take a uniform stand challenging arbitration orders in both the cases so it would wait for the outcome in Cairn Rnergy tax dispute case.

ET Energy World
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