Today, India said that a French media report that is linking a tax exemption given to a Reliance Group’s French subsidiary and an $8.7 billion fighter jet deal between the two nations was “totally inaccurate.”
Today, Le Monde, a French newspaper, reported that France waived a tax demand amounting to 143.7 million euros on a French subsidiary of Reliance Communications way back in 2015 when it was in negotiations to sell the jets to India. Le Monde said that the longstanding tax dispute was resolved between February and October of the same year.
Today, the Ministry of Defence of India said that the report was drawing a conjectural link between the jet deal and the tax relief.
In a statement, the ministry disclosed: “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.”
It added: “Any connections drawn between the tax issue and the Rafale matter is totally inaccurate, tendentious and is a mischievous attempt to disinform.”
For months, Congress Party, the main opposition party of India, has accused Narendra Modi, the Indian Prime Minister, of corruption in choosing Reliance Defence as the country’s domestic partner in the deal to purchase 36 Rafale planes from the Dassault Aviation of France.
Both Modi and Mumbai-based Reliance which is controlled by Anil Ambani, an industrialist, have both repeatedly denied the allegations.
In a statement that was released today, Reliance said that Reliance FLAG Atlantic France, which operates a cable network and telecom infrastructure business, mutually agreed with the authorities of France to pay 560 million rupees ($8 million) as tax for the period between 2008 and 2012 instead of the original demand that amounted to 11 billion rupees.
It said that during that it was the period when Reliance FLAG business had an operating loss that amounted to 2.7 million euros ($3 million).
In the statement, it said: “Reliance denies any favouritism or gain from the settlement.”
It added: “Reliance Flag settled tax disputes as per legal framework in France available to all companies operating in France.”