The country?s top 100 corporations paid around R31,000 crore as advance tax in the third quarter of the fiscal, the same amount they paid a year ago, indicating a steep fall in their profitability and more trouble for the economy in the coming months. The flat growth in advance tax outgo was in sync with the 5.1% drop in industrial output in October and the decline in investments.
Some of the largest firms including Reliance Industries, SBI and Maruti Suzuki reported a dip in advance tax outgo for the quarter against the year-ago period. Oil marketing companies, which did not pay any tax in the second quarter, avoided payments in this quarter too.
In the same quarter last year, advance tax payments by the top 100 companies rose 18%, while the growth was just 10% in the second quarter of the current fiscal. ?The flat growth in advance tax would make it difficult to achieve the direct tax collection target of R5.32 lakh crore estimated for this year,? a finance ministry official said.
According to data compiled by the ministry, ONGC has paid the highest advance tax, followed by SBI and Reliance Industries. The outgo by ONGC increased 11% to Rs 3,000 crore during October-December. The tax paid by RIL in the third quarter was 16% lower at Rs 1,000 crore from the year-ago period, while SBI’s tax outgo slipped 8% to Rs 1,730 crore.
Other companies that figured in the top 10 list are Tata Steel, Bhel, HDFC Bank and ITC. The outgo by LIC increased 9% to Rs 1,166 crore, while NMDC paid Rs 1,050 crore as advance tax, 10% higher than a year earlier.
The country’s largest auto company Maruti Suzuki paid just Rs 10 crore in the third quarter compared with Rs 310 crore in the corresponding period last fiscal. The dip in tax payment by the company is mainly due to a workers’ strike at its Manesar plant.
Mahindra & Mahindra paid Rs 200 crore as advance tax, 15% lower than the year-ago period. The payout by India’s largest engineering and construction conglomerate L&T was almost flat at Rs 350 crore.
Overall, these tax figures ? which give a glimpse of the financial strength of companies and the economy at large ? will disappoint the government, which is worried due to a decline in industrial production growth and inadequate growth in revenue collection.
The net direct tax collection rose only 8.63% to Rs 2.35 lakh crore during the first eight months of this fiscal on account of huge refunds of Rs 68,000 crore disbursed during the period. To achieve the Budget estimate of Rs 5.32 lakh crore, a growth of 19% is required in the direct tax mop-up in the current fiscal compared with the year-ago period.
