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 to the probe.
“In the past two-three months, the DGGI enquired about expenses claimed in the books of these AMCs, services rendered by distributors and related evidence, and contract details with distributors. It has also recorded statements of some of the online players facilitating buying and selling of MFs schem
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