A new Le Monde report has again ruffled the proverbial feathers of Rafale deal. Know how

PW Bureau

A report has alleged that French authorities  waived taxes worth $162.6 million in favour of Anil Ambani’s France-based telecom company

New Delhi: As the dust on the Rafale deal refuses to settle down, a fresh revelation by French newspaper Le Monde has ruffled the proverbial feathers of the controversy again. A report published by the French newspaper on Saturday has alleged that French authorities waived taxes worth $162.6 million (Rs 1,077 crores approximately) in favour of Anil Ambani’s France-based telecom company named, Reliance FLAG Atlantic France in 2015. The newspaper said that Ambani’s tax debt, the result of disputed tax litigation, was cleared six months after Prime Minister Narendra Modi announced the Rafale deal in April 2015. Here’s a screenshot of the tweet posted by Le Monde journalist Julien Bissou.

What was the litigation about?

Ambani’s company was placed under the scanner by French tax authorities and was found liable to pay 60 million euros in taxes for the period 2007 to 2010. At the time, Reliance Atlantic Flag France had offered to pay 7.6 million euros as taxes but that was rejected by French authorities who conducted another investigation, the report said. The other investigation scrutinised the period between 2010 and 2012 and at the end of it, Ambani was asked to pay an additional 91 million euros in taxes.

The Rafale timeline

It was in April 2015 that Modi had announced the Rafale deal with French company Dassault. Le Monde said that at the time Modi announced India’s decision to buy 36 Rafale combat aircraft in fly-away condition, the total amount owned by Ambani’s company was at least 151 million Euros.

However, six months after the Rafale deal was announced in India, between February 2015 and September 2015, French authorities reportedly settled the 143.7 million-euro tax dispute and accepted what had been offered by Reliance earlier: 7.3 million euros.

The decision raises questions as to why was a 7.3-million-euro settlement accepted by French authorities when the same had been rejected earlier.

What does Reliance say?

Meanwhile, Reliance responded to the Le Monde story via an official statement in which it said that the case pertained to 2008 and denied any “favouritism or gain” from the settlement. It also said that the tax demands were completely “unsustainable and illegal” and the disputes were settled “as per legal framework in France available to all companies operating in France.”

The backdrop

The news came just days after the Supreme Court of India admitted the newly published “privileged” Rafale documents in The Hindu, dismissing the government’s argument against hearing a review petition on its earlier ruling on the Rafale deal.