New Delhi, France said on Saturday that the tax issue of industrialist Anil Ambani’s France-based company Reliance Flag pertaining to the period 2008-2012 had been settled in “full adherence with the legislative and regulatory framework” and asserted there was no “political interference whatsoever”.
“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,” French Ambassador to India Alexandre Ziegler tweeted.
“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,” he added in another tweet.
The French envoy’s statement came in the wake of a media report that claimed that taxes of the company to the tune of 143.7 million euros were waived by the French authorities “just a few months” after Prime Minister Narendra Modi announced the decision to buy 36 Rafale fighter jets in 2015.
The Reliance Communications of Anil Ambani rubbished the media report, saying the tax issue of its subsidiary Reliance FLAG Atlantic France SAS pertained to the year 2008, much before the Indian government decided to purchase Rafale jets from French company Dassault.
“Reliance Flag tax issue pertains to 2008, nearly 10 years old,” the company said in a statement.
“Reliance Flag says the tax demands were completely unsustainable and illegal. Reliance denies any favouritism or gain from settlement,” it added.
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 – 2008-2012 i.e. nearly 10 years ago, Flag France had an operating loss of Rs 20 crore (i.e. Euro 2.7 million). French tax authorities had raised a tax demand of over Rs 1,100 crore for the same period. As per the French tax settlement process as per law, a mutual settlement agreement was signed to pay Rs 56 crore as a final settlement,” the company said.
The deal for procurement of 36 Rafale fighter jets from Dassault was announced in April 2015 during the visit of Prime Minister Modi to Paris.
Flag France owns a terrestrial cable network and other telecom infrastructure in France.