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Retrospective tax: Cairn example shows why FDI in oil & gas is in a mess

The retrospective tax controversy was highlighted by Vodafone, but Cairn Plc's continuing problems point to the impact this law has had on FDI in India's oil and gas sector

Topics
retrospective tax | Vodafone tax case | Vodafone

Jyoti Mukul  |  New Delhi 



oil, gas, offshore, drill, high, petrol, crude, biding, fields
Once a feted poster boy for investing in India’s sedimentary basins for oil and gas that could save imports, its paltry 0.1 per cent holding in Vedanta and the dividend that accrues from it are in the custody of the department

Edinburgh-based Cairn Plc, which slapped a restitution notice on the Indian government under Bilateral Investment Promotion and Protection Agreement (BIPA) in March 2015, is crying foul because its frozen assets here have been sold by the Delhi income tax department over a period of time. This is the fallout of a long-drawn case involving retrospective taxation of capital gains on transactions between foreign entities involving assets based in India. The company no longer has assets or investments in India. Once a feted poster boy for investing in India’s sedimentary basins for oil and gas that could save imports, its paltry 0.1 per cent holding in and the dividend that accrues from it are in the custody of the department.

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First Published: Tue, October 06 2020. 06:10 IST

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