The Congress-led opposition is again crying wolf on Rafale deal based on a new, unsubstantiated news report in a French daily

NEW DELHI: The Ministry of Defence (MoD) of the Indian government has reacted sharply to politically motivated attempts to link the Rafale deal between the Indian and French governments and purported tax benefits given to a French-registered telecom subsidiary of Anil Ambani’s Reliance Communications by the French government in 2015, as reported by French daily Le Monde.

Here is a statement released by the MoD on the subject:

We have seen reports drawing a 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 relates even remotely to the Rafale procurement concluded during the tenure of the present Government.

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

The French newspaper said 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.

In its reaction, Reliance Communications rejected any wrongdoing and said the tax dispute was settled under a legal framework which is available for all companies operating in France.

A spokesperson of Reliance Communications said 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 i.e. nearly 10 years ago, Flag France had an operating loss of ₹20 crore (Euro 2.7 million). French tax authorities had raised a tax demand of over Rs 1100 crore for the same period,” the official said.

“As per the French tax settlement process as per law, a mutual settlement agreement was signed to pay ₹56 crore as a final settlement,” he said.