India has stepped up its efforts to enforce tax collection to remedy its budget deficit. Other companies recently involved in tax disputes in India include Vodafone, IBM, Royal Dutch Shell and LG Electronics.
Cairn said the assessments were for the year ended March 31, 2007, and it was cooperating to provide the necessary information and would update the market in due course.
It said while talks were ongoing, it had been instructed by the income tax department to keep hold of its shares in Cairn India. Cairn Energy holds a 10.3 per cent stake in Cairn India, which is now majority owned by mining conglomerate Vedanta Resource