Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: list of goods taxed at 4% :: empanelment :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: TDS :: articles on VAT and GST in India :: VAT RATES :: ACCOUNTING STANDARDS :: due date for vat payment :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit :: form 3cd
 
 
Mergers and Acquisitions »
 Telecom M&As mean better spectrum utilisation, services: Govt
 Vodafone India-Idea Cellular merger deal gets CCI nod
 Surge in due diligence activity brings flood of business to big four
 As Reliance rolls out Jio Phone for 'free', mergers among smaller telcos may accelerate
 Building market institutions can help M&As move faster
 How corporate mergers and acquisitions impact small investors
 Merger control triggers and thresholds in India
 Centre eases pre-merger filing normsa
 Mergers and Acquisitions in Indian banking sector not threat for fintech players
 This part of our journey is value discovery: Kumar Mangalam Birla
 Health care mergers, acquisitions lead surge in global deals

ONGC may invite Cairn, Vedanta to sign pact
October, 04th 2011

State-owned Oil & Natural Gas Corp (ONGC) may this week invite Cairn India and Vedanta Resources for signing of an agreement on sharing of statutory levies on the all important Rajasthan oilfields.

The Board of ONGC had on September 27 agreed to waive its pre-emption rights and give consent to London-based miner Vedanta buying majority stake in Cairn India.
 
But the state-owned oil explorer had added a caveat that the no-objection certificate or NOC will be issued only after Cairn and Vedanta sign a legal document agreeing to share royalty and pay cess on oil produced from Rajasthan fields.

"ONGC may in next couple of days send a draft agreement to Cairn India and upon their agreeing to the language and content, the pact will be signed within this week," a source in knowledge of the development said.

Upon signing of the agreement, ONGC will give NOC to the deal but the transaction will conclude only after Home Ministry gives security clearance to Vedanta buying majority stake in Cairn India.

The need for a legal document had arisen because Cairn India insisted on ONGC giving no-objection before agreeing to conditions on royalty and cess that the government had set for approving the $9 billion transaction.

The source says Cairn doubts if partner ONGC would give consent if it agrees to the conditions. Similarly, ONGC thinks Cairn may backtrack on royalty and cess payments if it gives consent first.

Cairn India's 97% owners, including parent Cairn Energy of the UK, and new management Vedanta had accepted the riders set by the government.

ONGC, for whom the Rajasthan project had been a losing proposition because it paid royalty not just on its 30% share but also on Cairn India's 70% interest, has demanded an equitable sharing before the deal was cleared.

The government accepted ONGC contention and conditioned its approval to the deal on Cairn making royalty payments cost recoverable and agreeing to pay cess on its 70% share.

Cairn India does not pay royalty on its 70% stake in the Rajasthan fields. Royalty, as per the contract, is paid by ONGC, which got a 30% stake in the field for free.

Even before the Cairn-Vedanta deal was announced in August last year, ONGC had demanded that like all other taxes, royalty be made cost recoverable by adding it to the project costs. All project cost are first deducted from revenue earned from oil sales before profits are split between partners.

Cairn had opposed this as it would lower its profits. It also believed cess, likely royalty, was also an ONGC liability even though the contract for Rajasthan fields is silent on any such sharing.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions