While collections of gross corporation taxes rose 11% year-on-year to Rs 3.64 lakh crore in the first ten months of FY15, tax outflows from India Inc have fallen in the three months to December, reports Devangi Gandhi in Mumbai. For a sample of 3,008 companies (excluding banks, financials and oil marketing companies) profits fell 6.08% year-on-year to R27,267.51 crore in Q3FY15. The government has budgeted a growth in corporation taxes of 14.56% for the current fiscal.
Given how analysts have downgraded profit estimates for FY15 and FY16, the government may have to temper its estimates for corporate tax collections next year. Economists believe corporation tax collections in the current year at R4.34 lakh crore, a y-o-y growth of 9.9%, is lower than the average growth of 10.5% in the previous two fiscals. Profits for companies have been smaller than expected thanks to sluggish revenues; the top line for the same sample of 3,008 grew a meagre 0.4% y-o-y.
Among those companies that have paid out less as taxes in Q3FY13 are those that are into natural resources or commodity related business, infrastructure and construction companies, metal producers and some banks.
Collectively the quarterly tax expenses of heavyweights such as NTPC, ONGC, GAIL, Tata Steel, Bharti Airtel, Oil India, BHEL and SBI have declined by close to Rs 3,000 crore.