After Rafale Deal, Anil Ambani Group Got Rs1,125 crore Tax Waiver from France: Report
French authorities have waived taxes worth 143.7 million euros (about Rs1,125 crore) for Anil Ambani's France-based company just a few months after Indian prime minister Narendra Modi announced his plans to buy 36 Rafale fighter jets from Dassault, says a report from Le Monde.
According to the French newspaper report,
Mr Ambani, the chief of Reliance Anil Dhirubhai Ambani (R-ADA) group, has a telecom company registered in France called Reliance Atlantic FLAG France. FLAG France owns a terrestrial cable network and other telecom infrastructure in France.
"This company, investigated by French tax authorities and was found liable to pay 60 million euros in taxes for 2007 to 2010. Reliance ADA offered to pay 7.6 million euros as a settlement, which was rejected by the French tax authorities. The authorities conducted another investigation for the period 2010 to 2012 and asked for an additional 91 million euros in taxes from the company," it added.
Le Monde says, in April 2015, PM Modi announced plans to buy 36 Rafale fighter jets from Dassault. By then, the total amount owed by the Reliance ADA group company to French tax authorities was at least 151 million euros.
"Six months after Mr Modi's Rafale announcement, the French tax authorities accepted 7.3 million euros from Reliance Atlantic Flag as a settlement, instead of the much bigger sum of 151 million euros. So between February and October 2015, while the French were negotiating the Rafale contract with India, Mr Ambani enjoyed a tax waiver of 143,7 million euros from the French state. Quite a cozy deal, right?" the report added.
Reliance Communication, the R-ADA group unit, however, rubbished the Le Monde report. In a statement, the company says, "Reliance Flag tax issue pertains to 2008, nearly 10 years old. Reliance Flag says the tax demands were completely unsustainable and illegal. Reliance denies any favouritism or gain from settlement."
The statement added that the 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 Rs20 crore (2.7 million euro). French tax authorities had raised a tax demand of over Rs1,100 crore for the same period. As per the French tax settlement process as per the law, a mutual settlement agreement was signed to pay Rs56 crore as a final settlement," the company added.