RCom, Defence Ministry rubbish French media report on tax issue

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SME Times News Bureau | 13 Apr, 2019
The Reliance Communications on Saturday rubbished a media report which claimed that taxes to the tune of 143.7 million euro were waived by the French authorities for a France-based company of Anil Ambani "just a few months" after Prime Minister Narendra Modi announced the decision to buy 36 Rafale fighters in 2015.

The Defence Ministry also dismissed the report saying the connection drawn between the tax issue and the Rafale deal was "inaccurate" and a "mischievous attempt to disinform".

"We have seen reports drawing conjectural connection between tax exemption to a private company and procurement of Rafale fighter jets by Indian government. Neither the period of 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.

"Any connections drawn between the tax issue and the Rafale matter is totally inaccurate, tendentious and is a mischievous attempt to disinform," it added.

Earlier in a statement, the Reliance Communications had clarified that the tax issue of its subsidiary Reliance FLAG Atlantic France SAS pertained to the year 2008 and had been settled as per the local laws, much before the Indian government decided to purchase Rafale jets from French company Dassault.

"Reliance FLAG tax issue pertains to 2008, nearly 10 years old," the company said.

"Reliance FLAG says the tax demands were completely unsustainable and illegal. Reliance denies any favouritism or gain from settlement," it added.

The statement added that Reliance FLAG settled the tax disputes as per legal framework in France available to all companies operating in that country.

"During the period under consideration by the French Tax Authorities in 2008-2012 (nearly 10 years ago), FLAG France had an operating loss of Rs 20 crore (2.7 million euro).

"French tax authorities had raised a tax demand of over Rs 1,100 crore for the same period. As per the French tax settlement process as per law, a mutual settlement agreement was signed to pay Rs 56 crore as a final settlement," the company said.

The deal for procurement of 36 Rafale fighter jets from Dassault was announced in April 2015 during Modi's visit to Paris.

FLAG France owns a terrestrial cable network and other telecom infrastructure in France.