Stumped by inflated tax credits, govt keeps stern eye on banks, telecom cos

Centre may issue showcause notices by January next year to companies if transitional credit numbers are not revised

Taxpayers, beware! The government is keeping a close watch on some banks, insurance companies, technology and telecom firms that may have inflated input tax credit.

People familiar with the development told ET, "There are instances where the transitional credit has jumped by more than 50% from the period before GST (goods and services tax). The government want these companies to return transitional credit either erroneously claimed or inflated."

The finance ministry on Tuesday had urged businesses to revise any wrongful claim of tax credits from the previous indirect tax regime saying that “extraordinarily high” claims unsettles the trust between firms