Cairn In­dia, Vedanta Merger Only Af­ter Set­tling Tax Dis­pute: Govt

The Economic Times - - Companies - Press Trust of In­dia

New Delhi: In a set­back to min­ing mogul Anil Agar­wal, the gov­ern­ment on Mon­day said he can merge sub­sidiary Cairn In­dia with his flag­ship Vedanta only af­ter pay­ing for the shares the In­come Tax De­part­ment has at­tached fol­low­ing the .₹ 10,247-crore tax dis­pute.

Atop gov­ern­ment of­fi­cial said the merger can go ahead if the 9.8% share­hold­ing of Cairn Energy at­tached by the I-T De­part­ment is paid for or an equiv­a­lent bank guar­an­tee is fur­nished or ap­proval is given for is­sue of fresh shares. Agar­wal’s Vedanta Group had in 2011 ac­quired Cairn In­dia from its British pro­mot­ers, Cairn Energy, and last year pro­posed to merge the cash-rich firm with BSE-listed Vedanta. How­ever, a tax de­mand on both Cairn Energy and Cairn In­dia un­der a ret­ro­spec­tive legislation is now pos­ing as a hur­dle to the merger.

Clar­i­fy­ing on the is­sue, Rev­enue Sec­re­tary Has­mukh Ad­hia said: “The only con­straint in this case could be that the shares of Cairn Energy in Cairn In­dia can­not be alien­ated with­out the per­mis­sion of the gov­ern­ment.” “How­ever, the merger can take place sub­ject to the law of land once this is­sue of at­tach­ment is re­solved... Un­der the Sec­tion 281 of the I-T Act, you can­not dis­pose of shares with­out per­mis­sion of the Tax De­part­ment.” The I-T De­part­ment us­ing the ret­ro­spec­tive tax legislation had is­sued a .₹ 10,247-crore tax no­tice to Cairn Energy in Jan­uary 2014.

In Fe­bru­ary this year, the de­part­ment is­sued a fi­nal as­sess­ment or­der seek­ing over .₹ 29,000 crore in tax from Cairn Energy, in­clud­ing .₹ 18,800 crore in in­ter­est.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.