Reliance Retail, L&T lead as advance tax growth picks up in Q2

Major technology and manufacturing companies, including Infosys, Tech Mahindra, HCL, and Larsen & Toubro (L&T), reported a jump in tax payment in the second quarter, as companies ramped up operations after relaxation in pandemic induced-lockdown.
 
Even foreign banks like HSBC, Deutsche Bank, and JP Morgan Chase reported double-digit growth in payment.
 
However, some heavyweights like Reliance Industries (RIL), Life Insurance Corporation (LIC), State Bank of India (SBI), and HDFC Bank continued to drag.
 
RIL has reportedly not paid a second instalment of advance tax owing to a heavy fall in crude oil prices, which has left the company with no margin on refining.
 
However, its subsidiary Reliance Retail, which has turned out to be all the rage with global investors queuing up to invest, reported a 16.3 times jump. It paid Rs 521 crore against Rs 32 crore in the corresponding quarter of the previous financial year.
 
RIL had paid Rs 3,270 crore in Q2FY20.

The numbers, compiled by the Income Tax Department, suggest that Infosys’ advance tax payment stood at Rs 1,330 crore against Rs 1,150 crore in the same period a year ago, a growth rate of about 16 per cent.
 
In Q1FY21, Infosys’ payment was just 4 per cent up.
 
Tech Mahindra and HCL paid Rs 350 crore (up 34 per cent) and Rs 550 crore (up about 8 per cent), respectively. They were down 12 per cent and 6 per cent, respectively, in the first quarter of FY21.
 
L&T paid Rs 675 crore against Rs 120 crore in the same period a year ago -- an increase of 462 per cent. It was down 82 per cent in the first quarter, and collected just Rs 20 crore.
 
Foreign banks are on the top taxpayers’ list. Deutsche Bank, JP Morgan Chase, and HSBC paid 35-45 per cent more than what they did in the same period a year ago.
 
Deutsche Bank paid Rs 430 crore, which is a growth rate of 43 per cent. The other two paid Rs 430 crore and Rs 870 crore, respectively.
 
Even in the June quarter, none of them showed a decline. JP Morgan and HSBC were up 24 per cent and 5.5 per cent, respectively.
 
Among the FMCG players, Hindustan Unilever paid Rs 750 crore (up 36.36 per cent) against Rs 550 crore last year. However, ITC paid Rs 1,000 crore, a dip of 46 per cent as last year it had paid Rs 1,850 crore.
 
 In Q1, they reported a decline of 13 per cent and 30 per cent, respectively.
 
Top losers in the September quarter are mostly private banks including HDFC Bank and ICICI Bank. It seems they are yet to sail through the tough times owing to the moratorium. For instance, HDFC Bank paid Rs 3,600 crore against Rs 4,310 crore, showing a fall of 16.5 per cent.
 
ICICI Bank also showed a dip of 12 per cent, paying Rs 1,200 crore against Rs 1,375 crore in the same quarter last year.
 
LIC, which often rescues stressed companies, was also down by about 5 per cent, and collected Rs 2,811 crore against Rs 2,946 crore in the same period a year ago. However, in Q1, it showed growth of 10 per cent.
 
SBI, which reported a dip of 28 per cent in the first quarter, performed much better in the second quarter. Its tax outgo stood at Rs 2,976 crore (down 0.3 per cent) against Rs 2,985 crore in the same period a year ago.
 
The Budget estimate of the tax department is, however, still quite far off. It needs to meet a target of Rs 13.19 trillion in FY21.
 
As of September 17, gross direct tax collection was Rs 4.33 trillion, down 20 per cent from Rs 5.41 trillion in the same period of the previous year.