Under the scanner: Clutch of fund houses in a spot over tax credit claims

DGGI alleges tax credit claimed on expenses was much higher than prescribed limit

The Directorate General of Goods and Services Tax Intelligence (DGGI) is probing 7-8 mutual fund houses based in Mumbai and Kolkata for allegedly wrongfully claiming and availing of input tax credit during 2017-18 by showing cost allocation (based on the respective scheme) as capital expenditure in their books.

Notably, all the expenses incurred by an asset management company (AMC), including payments to channel partners/distributors, are capped at 2.25 per cent of AUM. But, in certain cases, tax credit claimed on expenses was much higher than the prescribed limit, in a bid to reduce their GST liability, said two official privy