Advance tax collections from the top 100 companies in the Mumbai region for the crucial and last quarter of 2009-10 have grown just 3.63 per cent compared to 24 per cent in the corresponding period last year.
Mumbai accounts for almost half the corporate tax collections in India. The meagre growth in the January-March quarter comes at a time when the economy is widely considered to have made a strong recovery.
Total tax collection from top 100 companies for the quarter is Rs 11,625 crore (Rs 11,218 crore in the same period last year), while annual collection from these companies stood at Rs 46,692 crore (Rs 38,724 crore).
Overall collections have also fallen short of target. Against a target of Rs 142,000 crore, Mumbai region has collected around Rs 106,000 crore tax in 2009-10, with this instalment of advance taxes.
| ADVANCE SIGNALS (Figures in Rs crore) | |||
| Name of assessee | Advance tax paid in | % increase/ decrease | |
| March ’09 | March ’10 | ||
| State Bank of India | 1,810.00 | 1,857.00 | 2.60 |
| LIC | 810.00 | 864.00 | 6.67 |
| Reliance Industries | 365.00 | 770.00 | 110.96 |
| Deposit Insurance & Credit Guarantee Corporation | 635.00 | 320.00 | -49.61 |
| Tata Steel | 406.00 | 513.00 | 26.35 |
| Indian Oil Corporation | 150.00 | 275.00 | 83.33 |
| ICICI Bank | 250.00 | 350.00 | 40.00 |
| Standard Chartered Bank | 165.00 | 200.00 | 21.21 |
| HDFC Bank | 275.00 | 300.00 | 9.09 |
| Bank of Baroda | 280.00 | 300.00 | 7.14 |
Admitting that collections have been below expectation, a senior official of the Central Board of Direct Taxes (CBDT) said: “The advance tax payment made in the fourth instalment last year was high since companies paid less in the third instalment anticipating a slow pick-up in income. The case has been different this year since companies have been paying the normal instalments.”
Another reason for the relatively low growth in collections was the abolition of Fringe Benefit Tax (FBT) in last year’s Budget, for which the notification came in December 2009. "It has made a difference of little more than Rs 4,000 crore in the tax collection,” the CBDT official said.
He estimated the impact of removing FBT at Rs 2,100-2,200 crore and a similar amount for adjustments allowed in the fourth installment, since companies had already made some payment to the government on this count. pending the notification.
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Incidentally, the Mumbai large tax payers’ unit (LTU), which has jurisdiction over 33 top tax-paying companies, saw a 17 per cent growth in advance tax paid in March 2010, compared to March 2009. The annual collection in LTU saw a growth of 37 per cent, year-on-year.
Meanwhile, the income-tax department has put the tax paid by stock brokers under the scanner. Officials said the stock market index had doubled over one year, but collections were neither reflected in regular tax collection nor in securities transaction tax.
“No share market broker is there among the top 20 tax payers. In the top 100, there are four or five brokers who have either not paid tax in this quarter or paid less than the corresponding quarter,” said a tax official.
| ANNUAL COLLECTION (Figures in Rs crore) | |||
| Name of assessee | Advance tax paid in | % increase/ | |
| 2008-09 | 2009-10 | decrease | |
| State Bank of India | 5,733.00 | 6,552.00 | 14.29 |
| LIC | 2,988.00 | 3,253.42 | 8.88 |
| Reliance Industries | 1,838.00 | 3,075.00 | 67.30 |
| Deposit Insurance & Credit Guarantee Corporation | 1,911.07 | 1,829.84 | -4.25 |
| Tata Steel | 2,111.00 | 1,793.00 | -15.06 |
| Indian Oil Corporation | 150.00 | 1,505.00 | 903.33 |
| ICICI Bank | 1,790.00 | 1,502.00 | -16.09 |
| Standard Chartered Bank | 1,230.00 | 1,405.00 | 14.23 |
| HDFC Bank | 1,105.00 | 1,375.00 | 24.43 |
| Bank of Baroda | 895.00 | 1,277.00 | 42.68 |
India Infoline is the only company that has paid higher tax in the fourth quarter of 2010 over the same period last year at Rs 20 crore (Rs 7 crore). Its annual tax payment is 90 per cent higher at Rs 80 crore.
Among the other share brokers in the top 100, Citigroup Global Markets India Private Ltd is the leading name to have paid no tax. Others in the top 100 — JM Morgan Stanley Securities, DSP Merrill Lynch, and JP Morgan India Private Ltd — have paid less tax in this quarter, while UBS Securities has paid no taxes in the fourth quarter.
JM Morgan Stanley, DSP Merrill Lynch and UBS had shown a drop in tax payments for March 2009-10.
In the auto sector, top tax payers Mahindra and Mahindra and Tata Motors have seen tax payments double. They did not pay taxes in March 2009.
Indian Oil Corporation has paid Rs 275 crore against Rs 150 crore last quarter, while no taxes have been received from Bharat Petroleum Corporation and Hindusthan Petroleum.
The largest dip in taxes in banking was seen in the case of Bank of India, which has paid Rs 100 crore (Rs 590 crore). Foreign banks led by HSBC and Citibank paid less tax over the last quarter in March 2009.