Financial capital disappoints with flat direct tax collection
Mumbai: Tax collection growth in the financial capital will be lesser than the targeted 20 percent going by the initial numbers of advance tax by corporates, an I-T official said Thursday.
Tax mop-up from Mumbai, which contributes nearly 40 percent of the total direct tax collection, and was set a target of Rs 2.04 lakh crore, is at best flat this fiscal, the official said.
"Tax collections cannot grow 20 percent if the GDP grows at 7 percent, there is also a below-the-mark growth in the IIP (manufacturing output), with volatility in stock markets and high interest rates adding to the woes," the official added.
Mukesh Ambani-led Reliance Industries, the largest company by market capitalisation, is understood to have paid Rs 1,130 crore; a tad more than Rs 1,054 crore last year.
The largest lender State Bank's tax outgo is believed to have increased marginally to Rs 1,650 crore from Rs 1,500 crore, while the same for the second largest ICICI Bank fell to Rs 425 crore from Rs 450 crore last year.
Advance tax payout is a barometer of a company's performance. It is a system of staggered payment of taxes by high paying entities so that the outgo does not get piled up towards the end of the fiscal. Typically, a company pays 25 percent of its total tax liability in the March quarter.
The official also pointed to the under-recoveries by oil marketing companies that are led by the troika of HPCL, BPCL and IOC to pay only Rs 200 crore in taxes this year against Rs 5,000 crore last fiscal.
Similarly, factors like windfall gains arising out of single deals are also not taken into consideration while fixing targets, he said, citing Piramal Healthcare which had paid Rs 4,000 crore last year and is at "near zero" this fiscal.
Some companies, notably the country's largest software player Tata Consultancy Services which paid Rs 550 crore against Rs 200 crore last year, did put up a good show.
Aditya Birla group firms like Grasim (Rs 100 crore this year versus Rs 130 crore) and Hindalco (Rs 150 crore versus Rs 160 crore) posted a decline in numbers, while cement major Ultratech, also from the same stable, paid handsomely at Rs 170 crore, Rs 50 crore more than last year, the sources said.
A majority of the banks, barring state-run IDBI Bank (Rs 200 crore versus Rs 210 crore last year) showed an improvement in advance tax payments while some like Bank of Baroda, HSBC were on a par with last year.
Engineering and construction major Larsen & Toubro's tax payment was also flat at Rs 300 crore, as was that of German power and electronics major Siemens which was flat at Rs 110 crore.
On the consumer goods side, auto majors Tata Motors' tax payment was flat at Rs 50 crore while Bajaj Auto's increased to Rs 290 crore from Rs 250 crore last year, the sources said.
Hindustan Unilever's tax outgo swelled to Rs 175 crore from Rs 140 crore last year, while the same for Godrej Consumer Products grew four-fold to Rs 40 crore, the sources said.
Publishing major Bennett, Coleman & Company paid less at Rs 70 crore from Rs 100 crore last year, the sources added.