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Anil firm got €144 mn tax waiver after Rafale deal: French media

New Delhi: 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, leading French newspaper Le Monde reported Saturday. In its reaction, Reliance Communications rejected any wrongdoing and said the tax dispute was settled under legal framework which is available for all companies operating in France.

The French newspaper said that the French tax authorities accepted 7.3 million euros from Reliance Flag Atlantic France as a settlement as against original demand of 151 million euros. Reliance Flag owns a terrestrial cable network and other telecom infrastructure 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 disinform.

"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 ministry said in a statement.

The French newspaper said that 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 asked the company to pay an additional 91 million euros in taxes, the report said.

It said that 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.

A spokesperson of Reliance Communications said that the tax demands were "completely unsustainable and illegal" and that the company denied any favouritism or gain from the settlement. "During the period under consideration by the French Tax Authorities — 2008-2012, ie nearly 10 years ago — Flag France had an operating loss of Rs 20 crore (Euro 2.7 million). The French tax authorities had raised a tax demand of over Rs 1,100 crore for the same period," the official said.

Reacting to the Le Monde report, the French embassy said in a statement that a global settlement was reached between the French tax authorities and the Reliance subsidiary and that it was not subject to any political interference.

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