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Defence Ministry: Link drawn between tax waiver to Anil Ambani’s firm and Rafale deal ‘inaccurate’

Neither the period of tax concession nor the subject matter of the concession relates even remotely to Rafale deal concluded during the tenure of the present government," the Defence Ministry said.

The taxes were waived a few months after PM Modi announced the deal to procure 36 Rafale jets from Dassault Aviation. (File)

Reacting to French newspaper Le Monde’s report, the Defence Ministry Saturday said the connection drawn between tax waiver by France to Anil Ambani’s company and the Rafale deal was “inaccurate”, “tendentious” and a “mischievous attempt to spread disinformation”.

In fresh revelations in the Rafale deal, Le Monde has reported that the French government waived tax liability worth 143.7 million euro for Anil Ambani’s French-based company Reliance Atlantic Flag France barely six months after Prime Minister Narendra Modi announced the deal for 36 Rafale fighter jets in Paris.

Calling the link drawn between the tax waiver to Ambani’s company and the Rafale deal as nothing but “conjecture”, a Defence Ministry spokesperson said the subject matter of the concession had nothing to do with the fighter jet agreement.

“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 tax concession nor the subject matter of the concession relate even remotely to Rafale deal concluded during the tenure of the present government,” the ministry said.

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The French authorities had raised a demand of 151 million euros from Ambani’s company. (File)

According to the Le Monde report, the French authorities had raised a demand of 151 million euros from Ambani’s company after tax audits for the period between 2007 and 2012, including default interest and penalties.

Ambani’s firm had offered a settlement for 7.6 mn euro in 2013 which was rejected by the French tax authorities. However, on October 22, 2015, the French authorities accepted 7.3 million euros as a settlement from Ambani’s company for the period between 2008 and 2014.

Coincidentally, it was on April 10, 2015, that PM Modi had announced the deal for buying 36 Rafale aircraft from France during an official visit to Paris. Soon after the announcement, Anil Ambani’s Reliance Defence had emerged as the lead offset partner for the deal. The total offsets for the deal worth 7.87 bn euro to be discharged in India were valued at Rs 30,000 crore.

Ambani’s Reliance group said in a statement that it “denies any favouritism or gain from settlement. Reliance Flag settled disputes as per legal framework in France available to all companies operating in France”.

No political interference in tax settlement with Ambani firm: France

Reacting to the report, France said a global settlement was reached between the French tax authorities and ‘Reliance Atlantic Flag France’ and it was not subject to any political interference.

“A global settlement was reached between the French tax authorities and Reliance Flag, a telecom company, in a tax dispute pertaining to the period 2008-2012,” the French embassy said in a statement.

“This settlement was conducted in full adherence with the legislative and regulatory framework governing this common practice of the tax administration,” the embassy further said.

PM acted as a ‘middleman’ for Anil Ambani: Congress

The report gave fresh ammunition to the Congress to corner Modi over the Rafale deal, with party spokesperson Randeep Surjewala alleging that the PM acted as a “middleman” for Anil Ambani.

“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),” he said.

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