Archive for June, 2021

Rahul Varman[1]

Amid the sweeping pandemic and the health emergency across the country, some may have missed the headline that Cairn Energy, a leading UK-based oil and gas exploration corporation, had filed a suit in New York to claim the international assets of Air India, the State-owned airline of India. The basis of Cairn’s demand is that it claims that the Indian government owes it a large sum as a result of a tax dispute. Though some of the immediate issues of the case and the rights and wrongs by the parties concerned are being discussed, especially by the business media, there are larger issues involved here regarding the relationship between big capital, especially big international capital, and the State; as also the very nature of big capital and the flagship institution through which it works, the corporation. Below we comment briefly on these questions.

Cairn Energy – India Tax Dispute
First, some bare details of the dispute between the Indian government and Cairn Energy.[2] In simple terms, the dispute is as follows: Cairn transferred its Indian assets from one subsidiary to another, and in this process, reaped a huge capital gain (i.e., an increase in the value of the asset, realised when the asset is sold). But no taxes were paid on this capital gain, as would normally have to be paid in India. Cairn’s defence was that the transaction was carried out abroad, even though the assets were Indian.

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Aspects no.s 75 & 76 has been ready for nearly one and a half months, but unfortunately the press was unable to print the issue due to Covid-related restrictions and lockdowns. We are posting the cover here and the full text here (click on the highlighted links to access the pdfs). However, we will now be able to bring out the print issue. Our apologies for the delay. — Editor.

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