Rafale deal: Congress targets PM Modi over French report on 'tax relief' to Anil Ambani; Defence Ministry, RCom rubbish claim

The Defence Ministry rubbished a media report which claimed that taxes to the tune of 143.7 million euro were waived by the French authorities for a France-based company of Anil Ambani "just a few months" after Prime Minister Narendra Modi announced the decision to buy 36 Rafale fighters in 2015. The Reliance Communications also dismissed the report.

Rafale deal Congress alleges Ambani got French tax concession due to Modi, Def Min rubbishes claim
A French Rafale fighter jet lands on the aircraft carrier "Charles de Gaulle" on February 7, 2019 in the Mediterranean sea. (Photo by VALERY HACHE / AFP)
By: ABP News Bureau
Updated: 13 Apr 2019 09:30 PM
NEW DELHI: With a French daily claiming that France waived taxes worth 143.7 million euros for a France-based company of Anil Ambani in 2015 when India was negotiating the Rafale deal, the Congress on Saturday alleged that Prime Minister Narendra Modi was acting as a "middleman" for his "crony businessman".

The Congress alleged that the tax concession for Ambani was due to Modi 'kripa' (blessings).

The party referred to a news report in a leading French newspaper Le Monde which alleged that France waived taxes worth 143.7 million euros to a French-registered telecom subsidiary of Reliance Communications in 2015, months after India's announcement of buying 36 Rafale jets, a claim termed as  "inaccurate" and "mischievous" by the Defence Ministry.

The Defence Ministry dismissed the report saying the connection drawn between the tax issue and the Rafale deal was "inaccurate" and a "mischievous attempt to disinform".

"We have seen reports drawing conjectural connection between tax exemption to a private company and procurement of Rafale fighter jets by Indian government. Neither the period of 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 Defence Ministry said in a statement.

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

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

France also said that the tax issue of 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 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.

"This is called zero sum choices, startling tax concession and Modi 'kripa'," Congress' chief spokesperson Randeep Surjewala said.

He said that the report exposed "layers" of crony capitalism and corruption. "PM Modi is acting as middleman for Anil Ambani. How many other companies in France have got a tax benefit? Is this not a quid pro quo for the purchase of aircraft? It is clear only one watchman is the thief," the Congress spokesperson said.

"Those that have Modi's blessings can get anything. If Modiji is there, then it is possibile. (Modi ji ki kripa jispar ho jaye uska kuch bhi ho sakta hai, Modi hai to mumkin hai)," he said taunting the BJP with its poll slogan.

Surjewala claimed that in 2017-18, Dassault Aviation deposited Rs 284 crore in the bank account of an inactive company Reliance Airport Developer's Ltd. "This took place when the government of India was making advance payments to Dassault Aviation," he said.

The Congress has been alleging "favouritism" and "corruption" in the deal, saying the government was procuring each aircraft at a cost of over Rs 1,670 crore as against Rs 526 crore finalised by the UPA government when it was negotiating. The government and the BJP have maintained that there has been no wrongdoing in the deal.

The deal for procurement of 36 Rafale fighter jets from Dassault was announced in April 2015 during Modi's visit to Paris.

(With inputs from agencies)