Advance tax outgo from Mumbai up 10% but falls below target
June, 16th 2012
Reflecting slowdown, the Mumbai region has shown 10 per cent growth in direct tax collection against the target of 16 per cent with top corporates like Reliance Industries, Larsen & Toubro and Tata Motors paying lower advance taxes for the first quarter of this fiscal. The advance tax payout by top 100 corporates in the region mainly comprising the financial capital is slower, an official in the income tax department said today. The region, which accounts for the largest chunk of tax receipts across the country, is targeting a 16 per cent jump in income tax collections at Rs 178,000 crore for the fiscal. However, the official said that there are some positive trends like Indian Oil Corporation paying Rs 125 crore for the three months, as compared to nil last year, as well as the jump shown by the banking and financial sector.
The growth, though below target, in advance tax collections comes amidst a slew of negative news flows on the macroeconomic front, like a slowdown in economic growth, depreciating currency and high cost of capital which dents investment plans, all of which have a bearing on a company's bottomline. Advance tax payments is a system of staggered payments of income taxes and are deemed to be a barometer of a company's performance during a quarter. Companies typically pay 15 per cent of their overall tax outgo in June. The Mukesh Ambani-led Reliance Industries reported a 14.66 per cent drop in advance tax payout at Rs 768 crore versus the year ago's Rs 900 crore, while Tata Motors' payout stood at Rs 55 crore versus the year ago's Rs 60 crore, income tax department sources said. Engineering major L&T has paid an advance tax of Rs 160 crore versus the year ago's Rs 180 crore, they said