RELATED ARTICLES |
Cairn Energy is selling between a 40 and 51 per cent stake in Cairn India -- the operator of the nation's largest onland oilfield -- to London-listed Vedanta for USD 6.65 billion to USD 8.48 billion.
"Tax will be paid in both India and UK," a Cairn Energy spokesperson said. "Averaged across both countries on the gross proceeds, it will be in the low teens. What is paid will be determined eventually by the final proceeds."
The spokesperson did not elaborate, but analysts said the 'low teens' being referred to in the statement may be the 13- 14 per cent tax liability on gross proceeds of the sale.
If Cairn Energy was to eventually sell only 40 per cent out of its 62.38 per cent stake in Cairn India for USD 6.65 billion, the combined tax liability in India and UK would be around USD 868 million. But if it was to sell 51 per cent for USD 8.48 billion, the tax liability would be USD 1.1 billion.
Vedanta is to acquire a 40 per cent stake from Cairn Energy and make an open offer for an additional 20 per cent to minority shareholders of Cairn India. In case the open offer is not fully subscribed, Cairn Energy will sell the additional shares, but with cap of 51 per cent, to make up for shortfall.
Vodafone Group Plc is likely to appeal in the Supreme Court against the Bombay High Court ruling that dismissed the company's challenge against a tax claim exceeding USD 2 billion.
The court today ruled that the Income Tax department has the jurisdiction to seek taxes from Vodafone on its 2007 purchase of Hutchison Whampoa Ltd's wireless mobile operations in India. The I-T department had argued that the world's biggest mobile phone company failed to deduct tax at source on its acquisition of Hutchison's stake in Hutchison Essar Ltd
 Limited.JPG)
Post new comment