Reconciliation with Kern became possible with the repeal of the retrospective tax law

New Delhi, Dt

The long-running legal dispute between British company Kern Energy and the Indian government will finally come to an end soon. Kern Energy has received Rs. 4,600 crore refund proposal has been accepted. However, the source of the dispute and settlement between the Government of India and Kern Energy is the retrospective tax law of 2017.

The root cause of the dispute between Kern Energy and the Government of India is 15 years old. In 2007-08, Kern UK transferred its shares of Kern India Holding to Kern India, an Indian subsidiary. As a result, the income tax department decided to levy capital gains tax from Kern Energy, which the company refused to pay. The UPA government had introduced retrospective tax legislation in 2016 to recover retrospective tax from companies like Kern and Vodafone. Under the Act, the UPA government will pay Rs. 2,500 crore (approximately ૬ 1.08 billion) in assets.

Kern Energy had filed a case in the International Arbitration Tribunal in March 2016 against the Indian government's decision to levy the tax. The case was decided in December 2016, in which an international arbitrator ruled in favor of Kern Energy and ordered the Indian government to pay the company નુક 1.06 billion in damages and, 1.04 billion in interest and expenses. The Indian government challenged the ruling in March 2021, refusing to accept an international arbitration award. Kern Energy, meanwhile, has sued the United States for એર 1.03 billion to seize Air India planes and apartments at the Indian embassy in Paris, in which a Paris court ruled in the company's favor.

In addition, the retrospective tax law enacted by the UPA government was repealed by the Center in the monsoon session last month to improve India's tarnished global reputation as an investment destination and to compromise with companies like Kern Energy and Vodafone. The repeal of this law has resulted in an end to the legal dispute between the Government of India and Kern Energy.