You are here: Home » Companies » News
Business Standard

Fix retrospective tax issues to comfort foreign investors: Vedanta to govt

Vedanta, which in 2011 bought Cairn India to enter oil business, is facing a Rs 204.95 bn tax demand

Press Trust of India  |  New Delhi 


Mining mogul Ltd has asked the to resolve issues to give comfort to foreign investors to invest in the almost stagnant domestic and gas exploration sector.

Vedanta, which in 2011 bought to enter business, is facing a Rs 204.95 bn (Rs 20,495 crore) demand that was raised using a legislation that gave the department powers to raise tax demand retrospectively.

In a tabloid-sized flier titled 'Exploration of & Gas and Mining of Metals and Minerals - Nation's Key to Prosperity', it asked the to "resolve issues to give comfort to foreign investors."

had in 2015 received an order from the Tax department for its alleged failure to deduct withholding tax on capital gains arising during 2006-07 in the hands of its erstwhile parent, Plc.

The demand of Rs 204.95 billion (Rs 20,495 crore) comprises Rs 10,248 crore tax and interest of Rs 102 billion (Rs 10,247 crore). The company has challenged the demand in an arbitration.

"has over 75 billion barrels of (boe) in-place resources, enough for our country's requirement. We consume about 2 billion boe of every year," said the flier, which carried the signature "with compliments from Anil Agarwal".

Stating that India's demand for will double in the next few years, it said the should "focus on production over revenue and simplify policies, with highest governance and transparency."

"This will make India the most attractive investment destination," it said.

Also, it wanted cess on domestically produced to be cut. "Domestic attracts high cess rate of 20 per cent. Ironically, imported is not taxed. Reduce the cess rate to 8 per cent."

Seeking simplification of processes, the company wanted self-certification model to avoid multiple approvals and pitched for exploration permits being granted on the same day.

"All contracts must be extended on timely basis and on same terms. This will enhance investors' confidence," it said.

Vedanta's oilfield contract is expiring in 2020 but the government has conditioned extension of the licence to produce from the fields on the company giving a higher revenue share to the government.

The company also wanted for the crude. "Domestic crude is being sold at a 15 per cent discount," it said, adding domestic refineries must pay a rate they would normally pay if the crude oil were to be imported.

"No investments will come if producers are to sell at a discount, to global price," it said. "Global fair price for crude will benefit all stakeholders.

First Published: Sun, January 14 2018. 16:00 IST