After ex-parent, Cairn India handed $3.2 bn withholding tax demand

Mumbai, March 13: A day after mining group Vedanta Resources-controlled Cairn India said it has not received any notice about the retrospective $1.6 billion income tax demand on Britain-based Cairn Energy, it has got a $3.26 billion withholding tax demand for an eight-year-old transaction involving its former parent company. “We would like to inform you that Cairn India Limited has received an order from the Income Tax Department today (Friday) for an alleged failure to deduct withholding tax on alleged capital gains arising during 2006-07 in the hands of Cairn UK Holdings Limited (CUHL), our erstwhile parent company, a subsidiary of Cairn Energy Plc,” Cairn India said in a filing to the Bombay Stock Exchange. “A demand of INR 20,495 Crore (comprising tax of approximately Rs.10,248 crore and interest of approximately Rs.10,247 crore) is alleged to be payable. Cairn India Ltd does not agree with this alleged demand and will pursue all possible options to protect its interest,” the statement added. “As was communicated yesterday (Thursday), from the media reports we understand that tax demand has also been made by the Income Tax department on Cairn UK Holdings Limited (CUHL) on this matter,” Cairn India said. (IANS)