A day ahead of the Budget, there could be another reason for the finance ministry to worry. The initial numbers of the last instalment of advance tax collections for the last quarter showed a tepid growth.
While banks and financial institutions led the collections, oil marketing companies paid zero tax. Banks such as State Bank of India (SBI) and HDFC Bank paid higher taxes. SBI paid the highest tax Rs 1,650 crore compared to Rs 1,500 crore last year.
Similarly, HDFC Bank paid Rs 600 crore versus Rs 550 crore. And insurance behemoth Life insurance Corporation (LIC) has paid Rs 970 crore compared to Rs 930 crore.
Private sector bank, ICICI, paid marginally lower taxes. It paid Rs 425 crore vis a vis Rs 450 crore last year.
However, oil marketing companies, which paid almost Rs 5,000 crore last year, have paid zero tax for this quarter because of low revenue projections and higher oil subsidy burden. In fact, for the entire year, they have paid only Rs 200 year.
Advance tax collections from the top 50 companies are marginally higher by 11 per cent at Rs 12,673 crore, according to tax sources. Last year, the collections were Rs 11,400 crore. The government, which is staring at a large fiscal deficit of 5.5 per cent (according to the Economic Survey), will hardly be satisfied with these numbers.
Among other companies, Reliance Industries paid Rs 1,130 crore compared to Rs 1,054 crore. India's largest information technology services provider Tata Consultancy Services (TCS), has managed to keep up its consistent growth and is expected to pay Rs 550 crore compared to Rs 200 crore last year. In the last quarter as well TCS paid Rs 530 crore.
Given the overall numbers, tax officials aren’t too buoyant as of now. “Mumbai's advance tax collection may miss the mark this time. We will get a clear picture only after a day or two as they are yet to be calculated,” said an income tax official.
In the auto segment, Tata Motors advance tax payment is expected to remain flat at Rs 50 crore, while Bajaj Auto’s tax liabilities are expected to be a little higher at Rs 290 crore compared to Rs 250 crore in the corresponding period last year.
Piramal Heathcare's tax payment is expected to be nil as compared to Rs 4,000 crore last year. Last year, Piramal Healtcare sold its domestic formulation business to Abbott for Rs 18,000 crore.
“Keeping in view the economy, GDP growth and the performance of the market advance tax payment was expected to take a hit,” said a senior income tax official.