News

India alleges 'irregularities' in tax reporting by banks, ATM providers

March 29, 2018

The Economic Times of India has reported that the government's revenue department intelligence unit is investigating alleged collusion between certain banks and ATM service providers to avoid paying value-added taxes and to wrongfully claim a tax credit.

The Directorate General of Goods and Services Tax Intelligence has contacted financial institutions that include Canara Bank, Punjab National Bank, the State Bank of India, and Syndicate Bank about the tax discrepancies.

DGGSTI also has sent letters to ATM service providers that include NCR, AGS Transact, Tata Payments Solutions and Hitachi on the issue.

According to The Economic Times, the government is seeking details from the service providers "in connection to the investigations into alleged irregularities in availment of cenvat credit pertaining to ATM transactions by certain banks … "

The department wants to know what types of services the companies have provided to banks, and is requesting copies of contract and work order agreements, invoices and records of service taxes paid. DGGSTI has requested similar information from the banks, according to the report.

Through a spokesperson, SBI told The Economic Times that  "[s]uch enquiry does not necessarily indicate any irregularity on the part of the bank and many times such enquiries are conducted across the sector."

A spokesperson for Hitachi said that the investigations concerned activities by the banks, and not those of the company.

Providers of ATM software, security and other services are also under investigation by DGGSTI, the report said.