The department ordered taking away $104 million dividend due to it from its remaining stake in the erstwhile subsidiary Cairn India (now called Vedanta Ltd) and another Rs 1,500 crore of tax refund due to it, a top source said. This follows an international arbitration panel last week deciding not to entertain a plea by Cairn Energy seeking injunction against the coercive action to recover the tax.
The source said the tax department will now move to take over the 9.8 per cent shareholding Cairn Energy had in Cairn India.
In an emailed statement, Cairn Energy confirmed the tax department's move.
"On June 16, 2017 the Indian Income Tax Department (IITD) issued an order to Vedanta India Ltd (VIL) directing it to pay over any sums due to Cairn. Sums due to Cairn from VIL now total $104 million, including historical dividends of $53 million and a further dividend of $51 million after the merger of CIL and VIL," it said.
The company said it has a high level of confidence in its case under the Treaty and, in addition to resolution of the retrospective tax dispute, its claim seeks damages equal to the value of the Group's residual shareholding in Cairn India at the time it was attached (approximately $1 billion).
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