Scots oil explorer Cairn insists it has complied with Indian tax laws after saying it has received two further notices over hundreds of millions of pounds in unpaid income tax in the country.
The company, which was forced to shelve its share buyback plans last month as the dispute over unpaid tax claims continues, said it will continue to contest the dispute with authorities, reported in Indian media as worth around £250million.
It emerged earlier this year that tax chiefs in India were probing the company’s dealings over results from its 2006-2007 financial year.
“Cairn has received two further notices from the Indian Income Tax Department,” the company said today.
“The first, dated 29 March 2014, is a request made to Cairn Energy PLC to file a tax return for the fiscal year ended 31 March 2007. Cairn intends to file a nil return for this notice.
“The second, dated 31 March 2014, claims that CUHL should have withheld tax on dividends paid to its parent company, Cairn Energy PLC. Neither Cairn nor CUHL has been asked to file any return in respect of this notice and Cairn intends to respond to the notice refuting this claim.
“Throughout its history of operating in India Cairn has been compliant with the tax legislation in force in each year. Cairn has stated that it intends to take whatever steps are necessary to protect the Company’s interests.”
The dispute has seen Cairn prevented from selling shares in its Indian subsidiary, worth an estimated £600million, while the row is ongoing.
Cairn is one of the largest independent oil and gas firms in the region, and operates more than a quarter of India’s entire domestic crude output.
It currently has nine blocks, including one on the giant onshore discovery at Rajasthan, along with two more on the west coast and four on the east coast. Cairn also has stakes in Sri Lanka and South Africa.