New Delhi:Ministry of Defence on Saturday rejected French newspaper Le Monde’s report that authorities waived off taxes worth 143.7 million euros in favour of Ambani’s telecom firm ‘Reliance Atlantic Flag France’ after the announcement of the Rafale jet deal in 2015.
Dismissing the allegations, the Ministry of Defence in a statement said,”We’ve seen reports drawing conjectural connection between tax exemption to a private company and procurement of Rafale jets by Government of India. Neither the period of tax concession nor subject matter of concession relate to Rafale procurement,concluded in present Government’s tenure.”
It added,”Any connections drawn between the tax issue and the Rafale matter is totally inaccurate, tendentious and is a mischievous attempt to disinform.”
Earlier in the day, Reliance Communication had also released a statement denying any ‘favouritism or gain’ from French authorities. “The tax demands were completely unsuitable and illegal,” the statement said. It claimed that the tax disputes were settled ‘as per legal framework in France available to all companies operating in France.
“Between 2008 and 2012, Flag France had an operating lossof Rs 20 crore while the French tax authorities had raised a tax demand of over Rs 1,100 crore for the same period. A mutual settlement agreement was signed to pay Rs 56 crore as a final settlement,” it added.
Meanwhile, Congress party mounted its attack on the Narendra Modi-led government following the report . “PM Modi is acting as middle man for Anil Ambani. How many other companies in France have got a tax benefit? Is this not a quid pro quo for the purchase of aircraft? It is clear ek hi chowkidar chor hai (Only one watchman is the thief),” Congress spokesperson Randeep Surjewala had said, Citing the Le Monde report.
The Congress has been alleging massive irregularities in the deal, saying the government was procuring each aircraft at a cost of over Rs 1,670 crore as against Rs 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 the 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 it was French tax authorities refused to accept the amount. The authorities conducted another probe for the period 2010 to 2012 and asked 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 Modi announced in Paris about the Rafale deal, the French authorities accepted 7.3 million euros from Reliance as a settlement as against the original demand of 151 million euros.
(With agency inputs)