Advance tax collections for the first quarter of the current financial year point to a strong growth in corporate sector profits. However, banks and financial services companies that are usually the largest contributors to the advance tax kitty disappointed with lower-than-expected numbers.
The country’s largest lender, State Bank of India, saw its advance tax payment declining to Rs 869 crore, compared to Rs 1,068 crore for the quarter ended March 31, 2009.
Advance tax payment of the country’s second-largest lender, ICICI Bank, was flat at Rs 350 crore.
| WELL BEGUN Advance tax payments by top companies in the first quarter | ||
| ’10-’11 |
’09-’10 | |
860-870
Nil
(Figures in Rs crore)
HDFC Bank, the second largest private sector lender, however, was a notable exception. Its advance tax payment rose by 26 per cent to Rs 315 crore from Rs 250 crore in the corresponding quarter a year ago.
Today was the last day for making advance tax payments.
The government proposes to collect Rs 3.01 lakh crore as corporate tax in 2010-11, up from Rs 2.5 lakh crore in the previous financial year.
Advance tax numbers are seen as an indicator of corporate sector profits. Payments in the first quarter are usually lower than that in subsequent quarters.
The tax paid by Bajaj Auto, the country’s second-largest motorcycle maker, for the June quarter, was more than double that a year ago, while the payment by refiner Hindustan Petroleum quadrupled.
Media giant Bennett, Coleman & Co Ltd paid Rs 55 crore, compared to Rs 30 crore a year ago, hinting at a revival in the fortunes of media companies.
However, fast-moving consumer goods major Hindustan Unilever paid Rs 75 crore in tax during the quarter — no change from its payment last year.
The tax payments are in line with the industrial production, which jumped by 17.6 per cent in April, from 1.1 per cent in the same period a year ago. The growth in the country’s gross domestic product during the current financial year is estimated to be 8.5 per cent, compared with 7.4 per cent in 2009-10. In addition, indirect taxes, which include customs, excise and service tax, went up by 49 per cent to about Rs 35,000 crore during April-May 2010-11.
In the previous quarter, advance tax collections from the top 100 companies in the Mumbai region grew just 3.63 per cent, compared to 24 per cent in the corresponding period last year.
The lower-than-expected growth in the last and crucial quarter was on account of a higher base and abolition of the fringe benefit tax.
Infosys Technologies, the country’s second-largest software company, reported an advance tax payment of Rs 275 crore, compared to Rs 230 crore in the previous year.
