India Inc shells out Rs 756 cr FBT

In 9 months, PSUs pay Rs 300 cr and pvt firms Rs 456 cr.

Even as Union finance minister P Chidambarm is expected to revisit the contentious fringe benefit tax (FBT) provision in the forthcoming Union Budget, 920 listed companies have paid Rs 756 crore as FBT during the nine months ended December 2005.

The actual figure could be higher as all listed companies are not revealing the outgo on account of FBT in their quarterly accounts.

During the quarter ended December 2005, these companies provided Rs 332 crore towards FBT, up from 169 crore in the quarter ended June. In the first quarter of 2005-06, the companies had paid Rs 255 crore on account of FBT.

"The FBT collection is certainly not on expected lines. The complexity of the structure has complicated the matter. We will not be surprised if the finance minister irons out glitches in the budget," said the chief financial officer of a manufacturing company.

The Rs 756 crore FBT payment by 920 companies accounts for only 1.95 per cent of their staff cost in three quarters. The impact of FBT on the profit before tax of sample companies is minuscule as it accounts for 0.86 per cent of the net profit of 920 companies.

Of the total FBT collection, almost 40 per cent or Rs 300 crore came from 15 public sector undertakings. It accounts for 1.92 per cent of nine months' salaries and wages and 0.75 per cent of the nine months' profits of 15 listed public sector undertakings, which have revealed the FBT expenses in their quarterly accounts.

The listed 905 companies in the private sector provided Rs 456 crore towards FBT "" 1.83 per cent of the salaries of their employees and 0.95 per cent of the net profit of these companies.

The State Bank of India group tops the list. The consolidated SBI accounts for the nine-month period show an FBT outgo of Rs 131 crore. This includes SBI as well as its seven associate banks.

SBI alone has paid Rs 31 crore FBT. The FBT payment accounts for 0.59 per cent of the employees cost for SBI and 5.60 per cent for SBI and its subsidiaries.

On a stand alone basis, ONGC is the highest FBT payer in nine months at Rs 43.32 crore, followed by other companies (see table).