The central government might extend Vivad Se Viswas, the direct tax resolution scheme, after March 31 if Cairn Energy wishes to settle the retrospective tax dispute through it.
During a meeting with finance ministry officials in February, the Edinburgh-based energy major was offered an immediate refund of $300 million if it chose to settle the tax dispute under the Vivad Se Vishwas scheme, Business Standard reported.
Under the scheme, the principal tax demand on Cairn will be reduced by half to Rs 5,100 crore, and interest and penalty will be waived, the report said.
The government has also offered to return the 1.8 percent company shares it had seized, the report said. According to the proposal, since the government had sold Cairn Energy shares worth Rs 6,500 crore, it will refund the remaining amount.
Moneycontrol could not independently verify the story.
"The only way to resolve the dispute immediately is through the Vivad Se Vishwas scheme. Cairn will get a refund in a matter of days. The arbitration process will take its own course and will go on for years. Although the scheme is closing on March 31, India will not hesitate to extend it in case Cairn wants to participate in it. But it must show an inclination," a government official told Business Standard.
In December 2020, the Permanent Court of Arbitration (PCA) at The Hague, Netherlands had ruled that the Indian government should pay damages worth $1.2 billion to Cairn Energy.