The Income Tax Department, which is probing Cairn Energy plc's transfer of India assets, has asked the UK-based company not to dispose of its 10.3 per cent holding in Cairn India.
Cairn Energy was widely seen as a likely participant in the Indian firm's share buyback, which opened yesterday. The I-T Department had started an investigation on January 15 to establish if capital gains tax was due from Cairn Energy's transfer of shares of Indian assets that were held in a subsidiary set up in the tax haven of Jersey to newly incorporated Cairn India in 2006.
"Cairn (Energy) has been contacted by the Income Tax Department of India to discuss income-tax assessments for the year ending March 31, 2007. Cairn is cooperating to provide the necessary documentation and information as requested," the Edinburgh-based company said in a statement. "While discussions are ongoing, the Income Tax Department has instructed Cairn Energy plc to hold its shares in Cairn India," it added.
The I-T Department had 'surveyed' Cairn India's Gurgaon office on January 15. It is investigating the asset transfer under Section 9 of the Income-Tax Act, which deals with income deemed to accrue or arise in India. A company spokesperson had on January 22 confirmed a "visit" by IT officials for "just a survey" and said the requested information was provided to them.
l>Ea #r X9pOm om Regulatory Authority of India had suggested a uniform fee 3-5 per cent from April 1, across telecom services for the success of the next round of spectrum auction. GSM industry body Cellular Operators Association of India is demanding that the government implement Trai suggestion. On the other hand, Reliance Jio and Videocon Telecom are opposing any change in existing SUC regime, specially those radiowaves that have been already allocated.
levied annually by the Government, SUC currently varies from 3-8 per cent for mobile service providers and 1 per cent for holders of BWA spectrum that can be used for 4G services. If a uniform SUC is implemented as recommended by Trai, mobile operators such as Airtel, Vodafone and Idea would be benefited the most. While a uniform SUC would adversely impact Reliance Jio Infocomm ltd (RJIl) which currently holds the BWA spectrum at one per cent SUC.