The overall corporate tax revenue in 2011-12 might fall a trifle short of even the revised estimate of 10% growth over the previous year due to the muted industrial activity, but big corporations generally seem to have done better than others.
This is evident from the relatively higher growth in collection reported by the field formations in major cities, including Mumbai, Bangalore, Ahmedabad, Chennai and Hyderabad, where most of the big companies are based. The only exception to this trend is Delhi, which reported negative growth in collections.
The zone-wise data of the Controller General of Accounts reviewed by FE also reveal that some smaller cities like Kanpur, Kochi, Bhopal and Amritsar reported healthy growth in collections last fiscal, while others like Patiala, Allahabad, Lucknow and Patna reported negative growth, in what perhaps indicates the changing pattern of corporate activity in the country.
In fact, the corporate tax collections in 2011-12 were initially estimated to grow at over 20% to reach R3.59 lakh crore. That was not to be. Going by the flash figures up to March (which, sources say, could be revised upwards by R3,000-4,000 crore), even the revised target of R3.27 lakh crore might be missed by a whisker. ?The data indicate that industrial slowdown might impacted select companies,” said a tax official asking not to be named.
Corporate tax collections in 2011-12 from Delhi plummeted 23% to R14,826 crore from the year ago. The slowdown pangs also hit other smaller cities, such as Pune, Patiala and Lucknow, which reported steep decline in collection in 2011-12, compared to the previous fiscal. However, this has not impacted the overall collection much, as the bigger cities generally did well.
Chennai registered only 13% increase, Mumbai, 15%, Kolkata, 21% and Bangalore 7%. Corporates based in Mumbai, which is the largest contributor of taxes in the country, have paid over 15% more in 2011-12 at R1.37 lakh crore. Companies of another metro cities Kolkata paid R36,476 crore, an increase of 21%, while taxes paid by Bangalore-based companies grew 6.7% to R94,809 crore. Bangalore is the second largest contributor of corporate taxes in the country.
The government has estimated to collect R5.32 lakh crore through direct taxes in 2011-12, out of which R3.59 lakh crore was to come from corporate taxes. However, on account of economic slowdown, the overall target was revised to R5 lakh crore and that for corporate tax, to R3.27 lakh crore. The muted industrial activities has slowed down India’s GDP growth in the last fiscal. Indian economy is expected to grow by 6.9% in 2011-12, the slowest pace in three years, from 8.4% a year ago.
