India Incs top 20 taxpayers are showing mixed signals, with almost 35% paying lower advance tax in September this year. Banking, petroleum and cement companies seem to be taking the sheen away from the India growth story. Reliance Industries, ICICI Bank, Union Bank of India, Citibank, Grasim and ACC paid lower advance tax in second quarter an indication that select sectors in the economy could be under pressure.

Advance tax is paid in four installments in June, September, December and March and is based on the taxpayers projected income and, thus, gives an indication of industrys performance in coming months. Overall direct tax collections have remained robust, witnessing 38% growth in the April-August 2008 period. In fact, advance tax collections were also bullish in June. However, experts say some sectors could have begun to feel the heat of slowdown and global factors. A downturn in overall direct tax collections can put the governments fiscal under pressure.

Banks net interest margins have been under pressure. In some cases, disproportionately large exposure to retail and volatility in forex markets could impact earnings. Cement companies margins have been under pressure because of raw material prices. Besides, the problem in real estate sector and sluggish infrastructure sector will have a bearing on their performance, says HDFC Bank chief economist Abheek Barua.

Grasim paid Rs 75 crore as advance tax, 67.39% lower than the last fiscal, ACC paid Rs 42 crore which was 41.67% lower than what it paid in Q2 last fiscal, and UltraTech paid Rs 40 crore in September this fiscal, 68% lower than the last fiscal. The economy grew at a rate of 7.9% in the first quarter of the fiscal, which is much slower than 9.2% in Q1 of 2007-08. Industrial output grew 7.1% in July 2008.

While some sectors may be facing the heat, the pessimism is not all pervasive. State Bank of India paid 48% higher advance tax at Rs 1,560 crore, Life Insurance Corporation paid Rs 870 crore, which was 19.07% higher than what it paid in Q2 last fiscal, and Tata Steel paid a whopping 124.72% higher tax of Rs 1,000 crore. Gujarat Ambuja and L&T managed to buck the trend, paying 14.29% and 25% higher advance tax of Rs 200 crore and Rs 150 crore in Q2 respectively.