Lucknow Ad Firms Under Scanner Over Alleged Circular Trading, ITC Irregularities:

The Uttar Pradesh State Tax Department has detected alleged circular trading and irregular input tax credit (ITC) claims by three firms involved in advertising and display services in Lucknow. Following the investigation, the three firms deposited Rs 2.48 crore in tax, officials said on Friday.

The irregularities came to light during an analysis of tax collected at source (TCS) data. The Special Investigation Branch of the State Tax Department examined payments made by government departments and local bodies to service providers.

Under Section 51 of the GST Act, government departments and local bodies deduct TCS from payments made to service providers. The department analysed TCS, turnover and tax liability data using the GST Prime portal and other analytical tools.

According to officials, the analysis suggested that the three advertising and display service firms were allegedly involved in circular trading with each other. They were also allegedly passing on ineligible ITC to reduce their tax liability.

The department also found that the firms had allegedly used irregular ITC while paying their taxes. Following these findings, simultaneous inspections were conducted at the firms' premises in Dalibagh, Jiamau and Transport Nagar areas of Lucknow.

During the investigation, the three firms deposited Rs 2.48 crore, Additional Commissioner, Grade-II (Special Investigation Branch), State Tax, Lucknow Zone-I, Manoj Kumar Vishwakarma said.

Officials also seized various documents and records from the firms. The department said further examination of these records could reveal additional tax evasion.

The investigation team included Deputy Commissioner Sanjeev Niranjan, State Tax Officers Deepak Singh, Arvind Verma and Raghavesh Singh, and Assistant Commissioner Kamlesh Kumar.