Govt says Le Monde report linking Rafale deal with Reliance tax

India on Saturday said a French media report linking a tax exemption given to a French subsidiary of Reliance Group and an $8.7 billion fighter jet deal between the two countries was “totally inaccurate”. India’s main Opposition party, Congress, has for months accused Prime Minister Narendra Modi of corruption in choosing Reliance Defence as a domestic partner in the deal to buy 36 Rafale planes from France’s Dassault Aviation. Congress has made it a major issue in India’s 39-day national election. The allegations have repeatedly been denied by both Modi and Mumbai-based Reliance, controlled by industrialist Anil Ambani.

Reliance said in a statement on Saturday that Reliance FLAG, which runs a cable network and telecom infrastructure business in France, mutually agreed with the French authorities to pay Rs 560 million ($8 million) as a tax for the period between 2008 and 2012 instead of the initial demand of 11 billion rupees. It said that during that period Reliance FLAG business had an operating loss of 2.7 million euros ($3 million). “Reliance denies any favouritism or gain from the settlement,” it said in the statement. “Reliance Flag settled tax disputes as per legal framework in France available to all companies operating in France.”

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