Advance tax collection: Automobile, IT firms lead surge in April-June qtr

Maruti Suzuki, Hero MotoCorp, TCS, and Infosys reported a jump between 44 per cent and 200 per cent in the April-June quarter of this financial year on account of a low base

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Heavyweights such as Reliance Industries, Tata Motors, HDFC, and ITC are yet to pay their first instalments
Shrimi Choudhary New Delhi
4 min read Last Updated : Jun 23 2021 | 6:10 AM IST
Sharp growth in advance tax payment by India Inc has been led mainly by automakers and technology giants including Maruti Suzuki, Hero MotoCorp, Tata Consultancy (TCS), and Infosys.

These four companies reported a jump between 44 per cent and 200 per cent in the April-June quarter of this financial year on account of a low base.

Even top financial institutions such as State Bank of India (SBI) and ICICI Bank reported lower (but double-digit) growth in tax payment.

According to officials, the first-quarter numbers have been compared with the beginning of the pandemic-induced lockdown, so automatically the figures showed a sharp jump. The second instalment will have a clearer picture, they said.

Meanwhile, final advance tax collection by companies showed 51 per cent growth (YoY) for the first quarter. Earlier, the preliminary data showed a growth rate of 146 per cent, which has now been revised downward. Direct tax collection (net) stood at Rs 2.33 trillion.

Heavyweights such as Reliance Industries, Tata Motors, HDFC, and ITC are yet to pay their first instalments.

Sources in the revenue department said robust advance tax collection showed state-wise local restrictions amid the second wave might not have much impact on the companies’ growth.

Companies and individuals are required to pay 15 per cent of their tax liability as the first instalment in the first quarter of the financial year.

According to official figures, TCS paid Rs 1,160 crore, a jump of 65 per cent, owing to robust demand in order flows as the pandemic accelerated digitisation. This was followed by Infosys, which paid Rs 720 crore, a growth rate of 44 per cent. Tech Mahindra also increased its tax outflow by 35 per cent at Rs 190 crore.

Automotive majors and fast-moving consumer goods firms too seem to have gained from the markets opening up and pent-up demand, which is buoyant in some categories. For instance, the tax outgo of Hero MotoCorp and Maruti Suzuki zoomed 95 per cent and 200 per cent, respectively.

Hero MotoCorp paid Rs 126 crore against Rs 64 crore in the same period last year. Maruti Suzuki paid Rs 150 crore.

FMCG companies including Hindustan Unilever, Procter & Gamble, and Nestle also led the table and reported growth up to 45 per cent. The three paid Rs 397 crore (up 20 per cent), Rs 32 crore (up 45 per cent) and Rs 105 crore (up 17 per cent), respectively. 

ICICI Bank saw a jump of 39 per cent with a tax payment of Rs 800 crore. HDFC Bank paid Rs 2,100 crore, which is 7.7 per cent higher than in the same period last year.

Besides, state-owned heavyweights such as State Bank of India (SBI) and Punjab National Bank, for which growth is nil, paid Rs 1,910 crore and Rs 83 crore respectively. SBI grew about 21 per cent

Life Insurance Corporation (LIC) of India was down 3 per cent, with a tax payment of Rs 1,578 crore.

Among other top payers, oil and gas major ONGC zoomed 241 per cent due to rise in oil prices in the international markets. It paid Rs 1,025 crore against Rs 300 crore in the April-June quarter of the current financial year.

NTPC, a state-run power generation firm, reported over 10 per cent growth, and paid Rs 485 crore this quarter.

L&T paid Rs 30 crore, 50 per cent higher than the Rs 20 crore in the corresponding period of 2020-21. Tata Steel paid Rs 750 crore after escaping tax payment in the same period a year ago.

 Amid the vaccination drive and sharp demand for life-saving drugs, pharmaceutical majors reported mixed numbers. 

Cipla grew 20 per cent and paid Rs 126 crore. This was followed by Dr Reddy’s, which paid Rs 60 crore, about 10 per cent more than last year.

Lupin reported a decline of 22 per cent and paid Rs 76 crore against Rs 98 crore a year ago.

Topics :CoronavirusTax collectionsIndian Economyautomobile industryIT firmsIndian companiesGDPMaruti SuzukiInfosys Tata Consultancy ServicesHero MotoCorp

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