Vedanta group entities withdraw multiple tax disputes with Indian govt
With this, the group is a step nearer to closing the dispute on withholdings tax with Cairn India
Vedanta Group | tax disputes
Jyoti Mukul |
Last Updated at December 13, 2021 22:25 IST
Anil Agarwal-controlled Vedanta Ltd and its related group entities today said they have withdrawn multiple tax disputes with the Union government. This includes the income tax appeal pending before the Delhi bench of the Income Tax Appellate Tribunal in a matter relating to international taxation. Its parent Vedanta Resources Ltd has also filed the application seeking withdrawal of the claim and termination of the arbitral proceedings pending before the Permanent Court for Arbitration in the International Court of Justice.
With this, the group is a step nearer to closing the dispute on withholdings tax with Cairn India. The 14 group entities include Volcan Investments, Volcan Investments Cyprus, Vedanta Holdings Jersey, Vedanta Resources Cyprus, Vedanta Resources Holdings, Vedanta Resources Finance, Finsider International Company, Richter Holding, Welter Trading, Westglobe, Vedanta Holdings Mauritius II, Twinstar Holdings and Vedanta Holdings Mauritius.
This would pave the way for settlement of disputes under a law that was brought in by the Union government earlier this year to reverse the retrospective taxation.
It would also meet the requirement under a settlement reached between Cairn Plc. now called Capricorn Energy, and the Union government for $1.2 billion arbitration on India.
“Vedanta Ltd., along with its related group entities, have filed the required statutory forms and undertakings in the prescribed Form 1 under the Indian Income Tax Rules, 1962. The aforesaid forms and undertakings have been accepted by the jurisdictional commissioner, and accordingly, a certificate to this effect, as prescribed in Form No. 2 under Rule 11UF of the Indian Income Tax Rules, 1962 has been issued,” the company said in a statement.
Under the Taxation Laws (Amendment) Act, 2021, companies have to file a declaration to “irrevocably withdraw, discontinue and not pursue” any legal proceedings. These include proceedings before the appellate forum, proceedings for arbitration, conciliation or mediation, and enforcing or pursuing attachments in respect of any award, order, or judgment. The draft rules require a similar undertaking from “interested parties” and shareholders in support of withdrawing cases. The amendment settled the retrospective cases pertaining to the 2012 legislation on the offshore indirect transfer of Indian assets.
Cairn India had in April 2015 moved the Delhi High Court against Rs 20,495-crore tax demanded from it as withholding tax that was levied on Cairn UK Holdings.
The Vedanta statement also said no further proceedings or claims would be initiated in any court or tribunal whether in India or outside India, pursuant to fulfilment of conditions as prescribed in Rule 11UF of the Indian Income Tax Rules, 1962 read with the Taxation Laws (Amendment) Act, 2021.
They also provided an undertaking, which includes a complete release of the Republic of India and any Indian Affiliates with respect to any award, judgment, or court order pertaining to the relevant order or orders or under the relevant order or orders, and with respect to any claim pertaining to the relevant order or orders.
The undertaking also includes an indemnity against any claims brought against the Republic of India or any India affiliate.
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First Published: Mon, December 13 2021. 20:32 IST