Vedanta Group Company Cairn India is under the income-tax department’s scrutiny over the transfer of shares by the explorer’s UK-based promoter Cairn Energy to the Indian subsidiary.
IT sleuths visited Cairn India’s office at Gurgaon in Haryana, and conducted a survey.
“Cairn India is fully compliant with all Indian income-tax laws and the income-tax assessments including transfer pricing assessment has been completed for 2006-07,” said the company’s spokesperson.
Cairn is one of the highest contributors to the exchequer by way of taxes and royalties; Cairn’s gross contribution to the exchequer is in excess of Rs 24,000 crore for the current year. As in the past, Cairn India will be more than happy to provide any documentation or information to the authorities, the official added.
The private explorer’s former promoter, the Edinburgh-based Cairn Energy, mopped up Rs 8,616 crore after launching an initial public offer. In 2011, it sold chunk of its stake to Anil Agarwal-promoted group for $ 8.67 billion.
According to a media report published on Wednesday, “The total share transfer or capital gains accrued in India was valued at Rs 26,000 crore, to be taxed at a rate of 30 per cent. The tax liability shall be raised on a non-resident company, Cairn UK, since it was the transferor and (was) filing its tax return in India from 2010 onwards. The tax liability on capital gains as of now appears to be over Rs 5,000 crore and could go up.”
Cairn India shares are trading at Rs 322.25, down 0.46 per cent on the BSE at 1.24 p.m.