Advance corporate tax paid by the top 94 Mumbai-based corporate houses was down marginally at Rs. 43,123 crore (Rs. 43,586 crore) in the first three quarters of this fiscal, according to Income-tax Department sources.
These companies, which contribute about 70 per cent of overall corporate tax collection in Mumbai, paid Rs.16,691 crore (Rs.16,750 crore) for the December quarter.
One time gain
The fall in advance tax collection is more disturbing considering that companies pay about 75 per cent of their tax commitment for the fiscal in the December quarter, said a cement company executive. “With no indication of a respite from high interest in the RBI policy on Friday, we expect the next few quarters to remain challenging; companies conserve cash by trimming down on spends and tightening capital expenditure,” he added.
Piramal Healthcare, which paid Rs.3,543 crore last year, has paid just Rs.5 crore (Rs.2,650 crore) in the first three quarters this fiscal. The company had one-time revenue from exit of core business last year. The hardship faced by the oil and gas sector was more than highlighted from the fact that Indian Oil, which paid Rs.1,276 crore in tax last fiscal, has not paid advance tax till the December quarter. Similarly, BPCL has also skipped payment so far against Rs.112 crore paid last fiscal.
Holcim Group companies Ambuja Cement and ACC saw payouts doubling to Rs.113 crore (Rs.60 crore) and Rs.95 crore (Rs.40 crore), respectively, largely due to lower base last year. Aditya Birla Group companies UltraTech Cement and Grasim paid lower advance tax of Rs.210 crore (Rs.230 crore) and Rs.120 crore (Rs.160 crore). Lafarge's payout was cut to Rs.45 crore (Rs.68 crore).
In the metals space, Hindustan Zinc paid Rs.400 crore (Rs.325 crore), while Hindalco maintained its payment at last year's level of Rs.200 crore. Engineering and infrastructure major L&T's payment was lower at Rs.350 crore (Rs.370 crore).
The higher tax payment by some of the metal and cement companies amid slowing infrastructure activities was mainly due to sharp raise in selling price and increase in their production capacity, said an analyst.
Auto majors Tata Motors and M&M disappointed with a lower payout of Rs.80 crore (Rs.220 crore) and Rs.210 (Rs.230 crore), respectively, even as Bajaj Auto raised the payment by 22 per cent to Rs.450 crore (Rs.370 crore).
So far, so good
The direct tax collections for the April-November period registered a growth of 20 per cent at Rs.3.04 lakh crore (Rs.2.54 lakh crore). The government has set a target for direct tax collections of Rs.5.85 lakh crore for this fiscal. Gross corporate tax collected was up 20 per cent at Rs.1.99 lakh crore (Rs.1.67 lakh crore) over the same period last year.
