After reports that the French government had favoured Anil Ambani's company with special tax benefits, the French Embassy on Saturday said a global settlement was reached between the tax authorities and 'Reliance Atlantic Flag France' and it was not subject to any political interference.
In a statement, the Embassy said the settlement was conducted in full adherence with the legislative and regulatory framework governing this common practice of the tax administration.
"A global settlement was reached between the French tax authorities and Reliance Flag, a telecom company, in a tax dispute pertaining to the period 2008-2012. This settlement was conducted in full adherence with the legislative and regulatory framework governing this common practice of the tax administration. It was not subject to any political interference whatsoever," the embassy said.
The statement comes in the wake of Congress today stepping up its attack on the BJP-led government and accused the French government of favouring Anil Ambani's company for getting special benefit in the form of tax settlement, days after the deal for the Rafale fighter jets was signed.
Earlier in the day, French newspaper Le Monde, in a report, said that Anil Ambani's Reliance received special benefit from the French government in the form of the tax settlement days after the deal for the Rafale fighter jets was signed between February and October 2015, while France was negotiating the Rafale contract with India.
The newspaper further stated 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.
Ministry of Defence and Reliance group were quick to issue rebuttals on the allegations.
The Defence Ministry said the connections drawn between the tax issue and the Rafale matter is "inaccurate, tendentious and a mischievous attempt to disinform."
The Defence Ministry said: "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. Any connections drawn between the tax issue and the Rafale matter is totally inaccurate, tendentious and is a mischievous attempt to disinform."
Reliance Communications released a statement denying any "favouritism or gain" from French authorities.
The tax demands were completely "unsustainable and illegal", the statement said, and it claimed that tax disputes were settled "as per legal framework in France available to all companies operating in France."
Reliance Communications said that between 2008 and 2012, Flag France had an operating loss of Rs 20 crore (EUR2.7 million) while the French tax authorities had raised a tax demand of over Rs 1,100 crore for the same period.
"A mutual settlement agreement was signed to pay Rs 56 crore as a final settlement," it said. (ANI)