Guwahati, July 8 -- The Assam government's decision to tighten scrutiny of Goods and Services Tax (GST) Input Tax Credit (ITC) claims by public works contractors has sparked a backlash from the construction sector, with contractors alleging that the new framework is aimed at boosting the state's revenue and imposes arbitrary benchmarks that have no basis in the GST law.

The dispute stems from a June 25 meeting chaired by Commissioner of Taxes Jitu Doley, during which senior officials finalised department-wise indicative ITC utilisation ratios for government contracts and approved a mechanism to scrutinise contractors whose tax credit claims exceed prescribed levels. The meeting also decided that contractors found availing fake ITC or usi...