Central Board of Direct Taxes member Saroj Bala told FE. When the companies are not registering any profits, we cant expect them to pay taxes, she said.
Bharat Petroleums advance tax payment till December 15 by when companies have to deposit 75% of the overall tax for the fiscalhas dipped by over 96% to just Rs 12 crore as compared to the Rs 334 crore it had paid in the same period a year ago.
Similarly, Indian Oil Corporation tax shell out so far this fiscal is a mere Rs 25.5 crore, a 98.7% decline compared to the Rs 1,967 crore it paid in the first three advance tax installments in 2007-08.
Another public sector oil PSU, Hindustan Petroleums advance tax payment has shrunk by 95.8% till December 15, 2008 to a mere Rs 10 crore in contrast to the Rs 236.7 crore it paid as advance tax a year ago.
Oil marketing companies dont expect to break even until the fourth quarter and are likely to pay their taxes in March next year, Amitabh Singh partner Ernst and Young said.
With the government deciding to cushion the impact of the raging crude oil prices that reached a high of nearly $147 a barrel earlier this year, before plummeting to levels of $35 a barrel, domestic oil companies have largely been in the red. It is only recently that they have started making profits on sale of petrol and diesel.
The oil marketing companies have already reported Rs 108,000 crore as under-recoveries between April and November 2008. Consequently, the three oil PSUs are unlikely to declare any dividend either during 2008-09. Last year, they accounted for over 45% of the exchequers non-tax revenues of Rs 95,000-odd crore.
Overall tax payments by the oil and gas sector too has dipped sharply by 25% to Rs 9,318 crore till December 15 as compared to Rs 12,480 crore till a year ago. The sector paid Rs 20,868 crore as advance tax last fiscal. But with the meagre payment so far this fiscal, the income tax department is not very optimistic of reaching last years target.
While Oil and Natural Gas Corporation of India continued to be the top advance tax paying company, its tax payment dropped by nearly 12% this fiscal to Rs 5,505 crore till December 15 this year as compared to Rs 6,2512 crore it paid in the first three tranches in 2007-08. Significantly OVL, the international exploration and production arm of ONGC has not deposited any tax in the December quarter this fiscal.