Growth in advance tax collections from the top 100 companies almost halved from 19 per cent in April-June to 9.9 per cent in July-September. Advance tax payments by these corporate assesses stood at Rs 31,707 crore in the second quarter of 2011-12, against Rs 28,863 crore in the corresponding period last year.
The country’s largest lender, State Bank of India, besides public sector units Indian Oil and Steel Authority of India Ltd, and private sector companies Piramal Healthcare, Bharti Airtel and Maruti Suzuki contributed to the decline in growth. On the other hand, ONGC, Reliance Industries, Tata Steel, NTPC, HDFC Bank and Bank of Baroda posted a good rise in payments.
A slowdown is visible in the auto sector, with Maruti Suzuki paying Rs 120 crore during the second quarter, down 56 per cent from last year. Advance tax payment by Hyundai declined 13.5 per cent to Rs 81 crore. Tata Motors also showed no increase in the second quarter.
Similarly, oil marketing companies, facing under-recoveries, reported dismal tax payments. In fact, Indian Oil did not pay any tax in the second quarter compared to Rs 351 crore in last year’s second quarter. Bharat Petroleum Corporation Ltd paid 83 per cent less tax at Rs 35 crore against Rs 206 crore over the period. Piramal Healthcare also did not pay any advance tax in the quarter.
“The second quarter has slowed, compared to the first quarter. Top companies have paid less tax, which means they have factored in a slowdown. Things are not rosy at all,” said a finance ministry official.
Advance tax payments, an indicator of financial performance of India Inc and the economy, stood at Rs 48,054 crore in the first six months of 2011-12 (April-September), against Rs 42,898 crore in the year-ago period, a growth of 12 per cent.
Traditionally, collections in the second quarter are better than the first.
A dip in growth sequentially strengthens fears of an economic slowdown, reflected by growth in industrial production having slumped to a 21-month low of 3.3 per cent in july.