UK-based Capricorn Energy, formerly called Cairn Energy, on Thursday said that it has received a tax refund of ₹7,900 crore from the Indian government to settle the retrospective taxation case, which started in 2015. “Capricorn is pleased to confirm that the expected Indian tax refund of ₹79 billion has now been paid and net proceeds of $1.06 billion have been received,” the company said in a statement. A circular is expected to be issued in early March detailing the shareholder resolutions required in connection with the proposed shareholder return of up to $700 million, comprising a $500 million tender offer and $200 million ongoing share repurchase programme, it added. Last month, the company concluded all necessary steps under the rules of the India Taxation (Amendment) Act 2021 required for payment by the Government of India of a tax refund of around ₹7,900 crore ($1.06 billion).

Resolves global proceedings

The amendment nullifies the tax assessment originally levied against it in January 2016 and orders the refund of the amount that was collected from Cairn. Subsequently on January 6, 2022, the upstream energy firm said it has entered into the final stage in its undertakings with the Indian government by withdrawing all global enforcement proceedings. This concludes all the necessary steps required of the company under the rules of the India Taxation (Amendment Act) 2021.  After failing to resolve the issue of retrospective tax in Indian courts, Cairn Energy filed a dispute under the UK-India investment treaty and went for international arbitration in 2015. The company also pursued its case at the Permanent Court of Arbitration at The Hague, which ordered a $1.2 billion arbitration award in December 2020. It had also registered the claim in several countries, including Canada, France, Netherlands and the US.

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