A Singapore website reported this week General Moeldoko was wearing a watch from the Richard Mille brand's Felipe Massa collection worth more than $100,000 during a recent interview with a broadcaster in the city-state.
However the general, who goes by one name, angrily hurled the watch to the ground when confronted by reporters about the claims, insisting he would not have done so if it was genuine.
"Just watch me, so you know I am not lying," he was quoted as saying in local media before throwing the timepiece onto the floor.
The general said it was a convincing imitation he had bought for just five million rupiah ($430).
He also told reporters it was just one of large collection of fakes that he owned.
However, the claim was met with scepticism and anger in a country where millions live in grinding poverty and there is much sensitivity about high-ranking officials leading luxurious lifestyles.
"Your watch is so expensive general compared to the salary of a worker," said Lucky Harri on Twitter.
Indonesia's founding principles "which discourage people from living in luxury, have been forgotten by the general", commented Pakde Djojo on the microblogging site.
One comment on the Jakarta Globe newspaper website noted: "I think a general would not wear counterfeit watches."
The Swiss watchmaking industry has mounted a strenuous campaign against counterfeit watches, maintaining it threatens a multi-billion-franc industry.