British Foreign Secretary Philip Hammond raised concerns in India today over a £1billion tax bill charged to oil explorer Cairn Energy.
Mr Hammond said Finance Minister Arun Jaitley had explained the Cairn case was started by the previous government and that he was powerless to stop it, but repeated his promise of no fresh retrospective tax litigation.
Cairn earlier this week filed a formal dispute against the demand from the Indian tax department, in the latest high-profile tax row to hit Asia’s third-largest economy.
The dispute is particularly embarrassing for Prime Minister Narendra Modi’s government which is trying to attract global businesses.
Mr Jaitley is scheduled to arrive in London tomorrow to drum up investments and unveil a statue of Mahatma Gandhi, the independence hero who railed against British imperialism.
Mr Hammond said: “The tax demand made to Cairn was very unwelcome
“I’ve had a very clear indication from Mr Jaitley…who is clear and categoric that this government will not be issuing any further notices under the retrospective tax legislation.”
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