No link between Reliance tax relief in France and Rafale jet deal: Government

Vastavam web: India on Saturday said a French media report linking a tax exemption given to a French subsidiary of Reliance Group and an $8.7 billion fighter jet deal between the two countries was “totally inaccurate.” French newspaper Le Monde reported on Saturday that France waived a tax demand of 143.7 million euros on a French subsidiary of Reliance Communications in 2015 when it was negotiating to sell the jets to India. The longstanding tax dispute was resolved between February and October that year, Le Monde said.

“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. Alexandre Ziegler, France’s ambassador to India, said a global settlement was reached between French authorities and Reliance FLAG in a tax dispute.

“This settlement was conducted in full adherence with the legislative and regulatory framework governing this common practice of the tax administration,” he said on Twitter late on Saturday. India’s main opposition Congress Party has for months accused Prime Minister Narendra Modi of corruption in choosing Reliance Defence as a domestic partner in the deal to buy 36 Rafale planes from France’s Dassault Aviation.

Congress has made it a major issue in India’s 39-day national election. The allegations have repeatedly been denied by both Modi and Mumbai-based Reliance, controlled by industrialist Anil Ambani. It said that during that period Reliance FLAG business had an operating loss of 2.7 million euros ($3 million).

“Reliance denies any favouritism or gain from the settlement,” it said in the statement. “Reliance Flag settled tax disputes as per legal framework in France available to all companies operating in France.” India’s Supreme Court said this week it would hear a request for an investigation into the Rafale jet deal.