Corporates shell out 36% more as advance tax in Q3

Corporates shell out 36% more as advance tax in Q3
The Hindu Business Line, December 16, 2009, Page 1

Collections put at Rs 10,700 cr; about 2,800 cos paid higher amounts.

Our Bureau, Mumbai

The early signs of economic revival seem to have emerged from the increase in advance tax payments made by most of the Mumbai-based corporate houses and banks in the third quarter of 2009-10.

Advance tax revenue from major companies rose 36 per cent to Rs 10,700 crore in the third quarter of the current fiscal against Rs 7,900 crore in the same period last fiscal.

There were about 2,800 companies that paid higher tax in the quarter under review , while about 700 companies paid less.

The total tax payment for the three quarters of the fiscal 2010 increased by 32 per cent to Rs 27,200 crore (Rs 20,600 crore). There were 6,500 companies which paid higher tax, while 1,500 reduced the outgo.

Mumbai, the financial capital of the country, accounts for nearly 45 per cent of country's tax revenue.

Although the tax collection was good in the Mumbai region during the third quarter, the Government may miss the overall growth target of 26 per cent for the fiscal, as collections in the first two quarters were below expectations, said an analyst.

Top tax payers in the current quarter include SBI, Reliance Industries, Tata Steel, LIC and HDFC Bank.

SBI paid Rs 1,795 crore as advance tax in the third quarter of FY'10 against Rs 1,700 crore paid in the same period last year. The bank's tax outgo for the fiscal till the third quarter stood at Rs 4,695 crore (Rs 3,923 crore). HDFC Bank paid Rs 400 crore (Rs 250 crore), Bank of Baroda Rs 355 crore (Rs 220 crore), Union Bank of India Rs 271 crore (Rs 205 crore), Central Bank of India Rs 138 crore (Rs 168 crore) and Deutsche Bank Rs 160 crore (Rs 80 crore). Among the banks which have reduced their payment in the quarter under review were Bank of India Rs 102 crore (Rs 307 crore) and ICICI at Rs 301 crore (Rs 625 crore).

LIC raised its tax payout by 13 per cent to Rs 981 crore (Rs 871). The state-owned insurance company has shelled out Rs 2,389 crore as tax till the December quarter. SIDBI paid Rs 180 crore (Rs 84 crore).

Indian Oil Corporation and HPCL skipped advance tax in the quarter. IOC had paid Rs 1,230 crore as tax till the December quarter, while HPCL paid Rs 102 crore.

Tata Steel nearly trebled its tax payment to Rs 650 crore (Rs 250 crore) in the December quarter, while TCS increased payment marginally to Rs 177 crore (Rs 129 crore). Engineering major L&T paid a lower tax of Rs 270 crore (Rs 312 crore).

"Though the corporate tax collection from other than banks was lower, one should wait till the next quarter before coming to any conclusion. L&T was a surprise as its collection was lower than expected; this may be because of the global recessionary conditions," said Mr. Alex Mathew, Head of Research at Geojit BNP Financial Services.

Aditya Birla Group company Grasim Industries, which had hived off its cement business for a merger with the group company UltraTech Cement, has doubled its advance tax payment to Rs 150 crore from Rs 75 crore. The company 's total advance tax payment till the third quarter of FY'10 rose 86 per cent to Rs 410 crore (Rs 220 crore).