Corporate tax collection from Mumbai slows to 7.5 per cent
September, 17th 2013
For the first time in the past 10 years, growth in corporate tax collections from Mumbai during the June-September period has dipped below 10%, to a mere 7.5%. The city accounts for 35-40% of the direct tax mopup in the country.
Corporate tax collections in normal circumstances tend to record a growth of 15-20%. However, a sluggish economy and a steep fall in rupee-dollar rate have put pressure on corporate margins, leading to a lower tax outgo. The diminished growth in tax collection during the June-September period is preceded by a comfortable April-June quarter that saw an over 15% increase in the tax collection.
Among the companies that paid higher tax are Mukesh Ambanipromoted Reliance IndustriesBSE -0.71 %, LIC and TCSBSE 1.55 %. RIL paid advance tax of Rs 1,670 crore in June-Sept this year compared to Rs 1,534 crore in the same period last year, LIC paid Rs 1,624 crore against Rs 1,300 crore last year while consulting major Tata Consultancy ServicesBSE 1.55 % paid Rs 1,025 crore compared to Rs 812 crore in the corresponding period last fiscal.
Asenior income-tax official said the advance tax payments from banks, that constitute nearly 33% of the corporate tax collection, are not very encouraging, especially the public sector banks.
State Bank of India (SBI), which tops the list of largest advance tax payers from Mumbai, paid much less than the last year. It paid Rs 1,120 crore against the Rs 1,820-crore it paid during the corresponding period last fiscal. Some banks have reported a rise in their tax payment, but the percentage rise is marginal, much below the usual jump of 15-25%.
Income-tax sources said the rupee depreciation has taken a toll on banks' margins, as some of them are struggling with treasury losses. Bank of BarodaBSE -3.58 % paid Rs 630 crore against Rs 620 crore last year while Bank of India's contribution was Rs 270 crore against Rs 200 crore. Some foreign banks have better figures, such as Citibank that paid Rs 610 crore against Rs 400 crore in June-Sptember period last year. However, HSBC Bank's outgo showed a dip, to Rs 425 crore from Rs 500 crore last year. HDFC BankBSE -0.64 %, one of the largest private banks, paid Rs 1,375 crore against Rs 1,100 crore. NABARD paid Rs 440 crore against last year's Rs230 crore. FMCG major Hindustan UnileverBSE -0.46 % has a marginal increase of Rs 5 crore in its tax outgo, from Rs 300 crore to Rs 305 crore. Cement manufacturer Ambuja Cement has a dip in its tax outgo with Rs 116 crore against Rs 150 crore. Engineering major L&T's tax outgo remained same at Rs 350 crore. Mahindra & Mahindra Rs 116 crore (Rs 150 crore), two and three-wheeler major Bajaj AutoBSE -0.11 % paid Rs 365 crore against Rs 300 crore last year.