A French newspaper reported on Saturday that France waived taxes worth 143.7 million euros to a French-registered telecom subsidiary of Anil Ambani’s Reliance Communications in 2015, months after India’s announcement of buying 36 Rafale jets.
The bankrupt telecom giant Reliance Communications rejected any wrongdoing and said the tax dispute was settled under a legal framework that is available to all companies operating in France.
The French newspaper reported that French tax authorities accepted 7.3 million euros from Reliance Flag Atlantic France as a settlement against an original demand of 151 million euros. Reliance Flag owns a terrestrial cable network and other telecom infrastructures in France.
Reacting to the report, the Defence Ministry said any connections drawn between the tax issue and the Rafale matter is totally inaccurate, tendentious and is a mischievous attempt to dis-inform.
“We have seen reports drawing conjectural connection between tax exemption to a private company and procurement of Rafale fighter jets by government of India. Neither the period of the tax concession nor the subject matter of the concession relate even remotely to the Rafale procurement concluded during the tenure of the present government,” the Defence Ministry said in a statement.
Prime Minister Narendra Modi had announced India would buy 36 Rafale jets after talks with the then French President Francois Hollande on the 10th of April in Paris. The final deal was sealed on the 23rd of September 2016.
The Congress has been alleging massive irregularities in the deal, saying the government was procuring each aircraft at a cost of over INR₹ 1,670 crore as against INR₹ 526 crore finalised by the UPA government when it was negotiating the deal.
The Congress has also been targeting the government over selection of Anil Ambani owned Reliance Defence as an offset partner for Dassault Aviation, the manufacturer of Rafale. The government has rejected these allegations.
The French newspaper said the company was investigated by French tax authorities and found liable to pay 60 million euros in taxes for the period 2007 to 2010.
However, Reliance offered to pay 7.6 million euros only as a settlement, but the French tax authorities refused to accept the amount. The authorities conducted another probe for the period 2010 to 2012 and told the company to pay an additional 91 million euros in taxes, the report said.
It said by April 2015, the total amount owed by Reliance to the French authorities in taxes was at least 151 million euros.
In October, six months after PM Modi announced the Rafale deal in Paris, the French authorities accepted 7.3 million euros from Reliance as a settlement as against the original demand of 151 million euros.
A spokesperson of Reliance Communications said the tax demands were “completely unsustainable and illegal” and that the company denied any favouritism or gain from the settlement.
Source : Various