Advance tax payments by India Incs top 100 swell 18.7% to 27,531 crore
December, 21st 2010
Advance tax payments by Indias top 100 corporate taxpayers rose 18.7% in December from a year ago, indicating better corporate performance in the third quarter.
The third quarter payments are closely watched by the government as these numbers form the basis for revised revenue estimates in the Union Budget, presented in February. An 18.7% growth in advance tax, higher than the required 14% for meeting budget targets, gives some comfort to the government that has seen its spending rise because of new schemes and higher subsidy outgo.
Top 100 companies paid Rs 27,531 crore in advance tax in the month, compared with Rs 23,190 crore in December last year, a tax department official said.
Advance tax is paid in four instalments in June, September, December and March and is based on taxpayers projected earnings, thus giving an indication of industrys performance in the months to come.
Corporate tax collections grew 21.3% and personal income tax rose by 16.2% in April-December 2010, as the total direct tax collections neared Rs 3,00,000 crore mark. However, experts say the collections do not yet reflect the expected 9% GDP growth for the current fiscal.
Collections are a little subdued. I expected that with over 8.5% (GDP growth) collections should have grown by 25%, said Abheek Barua, chief economist at private sector lender HDFC Bank . He said this could be due to margin pressures faced by companies following a spike in commodity prices and cautioned that this could well be an indication of a deceleration.
The government has budgeted Rs 4,30,000 crore from direct taxes in the current fiscal. But it needs a higher revenue growth than budgeted, having committed an additional expenditure of more than Rs 75,000 crore in the current fiscal through two supplementary demands for grants, wiping out the windfall gain of Rs 1,00,000 crore from auction of airwaves.
Its subsidy bill is also expected to cross the budget estimates, following the spike in global commodity prices.
The fertiliser ministry has projected a revised demand of Rs 82,245 crore as against the budgeted Rs 52,837 crore, citing hardening international prices of key inputs and imported fertilisers.
The petroleum ministry could also seek extra funds to compensate oil companies for higher losses incurred in selling fuel at below cost as global crude prices have risen to over $90 a barrel.
The finance ministry had budgeted Rs 3,108 crore towards petroleum subsidy, but provided another Rs 14,000 crore in the first supplementary demand.
Third quarter payments are closely watched as these numbers form the basis for revised revenue estimates in the Union Budget
An 18.7% growth in advance tax gives some comfort to the government that has seen its spending rise
Corporate tax collections grew 21.3% and personal income-tax rose by 16.2%
The government has budgeted Rs 4,30,000 cr from direct taxes in the current fiscal.