The Income Tax Department has ordered coercive action against oil and gas exploration company Cairn Energy Plc to recover Rs 10,247 crore of retrospective tax after the British firm lost a case challenging the move before an international arbitration panel, reported PTI on Monday.

In order to recover the dues, the I-T department has ordered taking away $104 million (Rs 6.69 billion) dividend due to it from its remaining stake in the erstwhile subsidiary Cairn India, which is now called Vedanta Ltd.

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Cairn Energy will also not receive the Rs 1,500-crore tax refund that is owed to them. The I-T department will now proceed to take over the 9.8% shareholding Cairn Energy had in Cairn India.

In a statement, the oil company confirmed the I-T department’s move, but said it will continue with the international arbitration proceedings against the retrospective tax demand. The company said it has a high level of confidence in its case under the UK-India Bilateral Investment Treaty, and is also seeking damages equal to the value of the its residual shareholding in Cairn India.

The retrospective tax is on short-term capital gains that Cairn had made when it transferred ownership from Cairn UK Holdings to Cairn India in 2006.