No political interference in tax settlement with Anil Ambani firm: French Embassy

The taxes were waived a few months after PM Modi announced the deal to procure 36 Rafale jets from Dassault Aviation. (File)

After a row erupted over reports that the French government granted massive tax waivers to Anil Ambani's firm, the French Embassy 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.

The embassy added that the settlement was conducted in full adherence with the legislative and regulatory framework, PTI reported. "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," the French embassy said in a statement.

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"This settlement was conducted in full adherence with the legislative and regulatory framework governing this common practice of the tax administration," the embassy said.

The development comes hours after French newspaper Le Monde reported that the authorities had waived off tax liability worth 143.7 million euro for Anil Ambani's French-based company Reliance Atlantic Flag France barely six months after Prime Minister Narendra Modi announced a government to government deal for 36 Rafale fighter jets.

French aircraft Rafale lands during the inauguration of the 12th edition of AERO India 2019 air show at Yelahanka airbase in Bengaluru, on Wednesday. (PTI)

The revelation is likely to further stir the controversy surrounding the Rafale fighter jet deal, which is already facing heavy political backlash in India.

Meanwhile, the Ministry Defence (MoD) termed the linkage of the tax waiver by France to Anil Ambani's company and the Rafale deal "inaccurate". "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 tax concession nor the subject matter of the concession relates even remotely to Rafale deal concluded during the tenure of the present government," the Defence Ministry said.

According to the Le Monde report, the French authorities had raised a demand of 151 million euros from Ambani's company after tax audits for the period between 2007 and 2012, including default interest and penalties.

Ambani's firm had offered a settlement for 7.6 mn euro in 2013 which was rejected by the French tax authorities. However, on October 22, 2015, the French authorities accepted 7.3 million euros as a settlement from Ambani's company for the period between 2008 and 2014.

Ambani's Reliance group said in a statement that it "denies any favouritism or gain from settlement. Reliance Flag settled disputes as per legal framework in France available to all companies operating in France".