Direct tax collection remained sluggish with the first quarter advance tax showing a marginal growth of 5% over the April-June period last year. The total advance tax payment for Q1 was Rs 33,086 crore, of this the top 100 companies accounted for Rs 17,900 crore.
The slowdown in the economy seems to have impacted profitability projection of major corporates as the growth in advance tax payments of 100 top companies showed an increase of 5%, the same as the overall collection figure. State-run ONGC, LIC and SBI were top of the list, posting maximum growth in advance tax outgo. ONGC's first quarter tax payment of Rs 1,347 crore was 26% more than the same period last year while SBI's payout of Rs 1,170 crore was 6% more than what it had paid last year. LIC paid Rs 638 crore, around 9% more than last year. In anticipation of their profitability for the year, corporates pay advance tax which is staggered into 15% for the first quarter, 30% in next two quarters and 25% in the last quarter.
The overall net direct tax collection till June 18 was Rs 84,000 crore, according to a senior official in the Central Board of Direct Taxes. Poor performance of direct tax collection has forced the government to defer income tax refunds. The disbursal of refunds has already come down by 55% compared to last year in the first two months of the current fiscal. The low growth in corporate tax collection is worrying for the income tax department as it needs to register at least 15% growth to meet the budget target of Rs 5.70 lakh crore.