The government accepted Cairn's offer of a retrospective tax

(PTI) New delhi date. 13

The retrospective tax dispute with Cairn, India's largest oilfield supplier, is set to end. The government has accepted the PLC allowing Cairn Energy's tax refund, sources said in a statement.

In line with the provisions of the new law repealing the retrospective taxation charge, Cairn India told the Indian government earlier this month that it would agree to repeal the retroactive tax against it anywhere in the world.

According to sources close to the incident, the government has issued Form-3 to Cairn. It said the government was committed to refunding the amount collected as retrospective tax. After receiving Form 3, Cairn has started the process of withdrawing the cases filed against the Government of India in various international courts.

The Indian government will pay Cairn a refund of Rs 500 crore once the process of withdrawing the case from the international court is completed. However, the withdrawal process will take three to four months to complete.

However, a spokesman for Cairn could not be reached for comment. Meanwhile, a senior finance ministry official said the government had accepted Cairn's offer.

The government enacted a new law in August to repeal the retrospective tax in view of the damage done to India's image amid efforts to attract foreign investment. Under which the retrospective tax levied on multinational companies like Vodafone, Sanofi, Submiller, AB Inbev and Cairn will be abolished.

Earlier on November 3, Cairn said it had entered into an agreement with the Government of India under the Taxation Amendment Bill, 2021 for tax refunds.