Advance tax collections enter the slow lane

September quarter collections way behind targets.

It's bad news for the government. The advance tax collections for the Mumbai zone that accounts for almost half of the total corporate tax kitty has fallen far short of expectations.

Income tax department sources said the collections for the quarter ended September this year had remained stagnant at the level ""Rs 5,500 crore "" achieved in the same period last year.

Tax collections usually show a 15-20 per cent growth in the period as companies pay almost 30 per cent of their profit as advance tax in the September quarter against 15 per cent for the June quarter. 
 

Cash crop                                      (All figures in Rs crore)
Company	Tax paid in July-Sept 05	Tax paid in July-Sept 04
Tata Motors	55	102
Grasim	80	105
Hindalco	125	90
State Bank of India	559	641
Bank of India	95	95
HDFC Bank	120	100

The sources said the September collections had put a huge pressure on the department, which had to achieve a 30 per cent growth in tax collections for this fiscal.

According to sources in the income tax department, three oil companies "" Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum "" have not paid any tax due to their depressed earnings, mainly due to the impact of higher oil prices on their profit margins. This has affected the entire collections for the Mumbai zone.

Advance tax payments by other big companies have also not been too encouraging. Figures available until now show Tata Motors has paid Rs 55 crore compared with Rs 102 crore last year. Grasim has paid Rs 80 crore (Rs 105 crore) and Hindalco has paid Rs 125 crore against Rs 90 crore in the same period last year.

The State Bank of India has paid around Rs 559 crore against Rs 641 crore in the corresponding quarter last year. Bank of India has maintained advance tax payments at Rs 95 crore and HDFC Bank has paid Rs 120 crore against Rs 100 crore last year.

But corporate finance executives said though there might be a temporary slowdown in tax collections, it did not reflect depressed corporate earnings.