Advance tax collections, a bellwether of corporate profitability, have grown strongly in the fourth quarter of 2007-08, prompting analysts to say that the expected slowdown in economic growth has not yet impacted corporate bottom line.
Latest indications suggest advance tax collections, which are paid on the basis of internal estimates of profits, are likely to be over Rs 50,000 crore in the fourth quarter till March 15 this financial year across India.
Companies are required to pay the tax in four quarterly instalments, the last being on March 15 every year.
Finance ministry sources said the trend shows that advance tax collections have grown at a similar pace as overall direct tax collections, which have grown over 40 per cent so far this fiscal.
The list of top 10 companies paying advance tax was led by public sector oil major ONGC, which retained its position of pre-eminence, although its tax payout declined 25 per cent.
However, another public sector oil major — Indian Oil — paid nearly Rs 1,140 crore, nearly double the figure in the comparable period under review.
Two companies saw the highest growth in terms of advance tax payout. Financial services company HDFC more than trebled its payout, while diversified conglomerate Reliance Industries saw the tax outgo nearly treble for the quarter (see chart).
ICICI Bank has paid Rs 250 crore, compared to Rs 125 crore in the year-ago quarter. However, Tata Steel’s advance tax payment declined to around Rs 300 crore, 14 per cent lower than the same quarter last year.
Tata Motors also saw a decline with payout at Rs 75 crore over Rs 190 crore in the same quarter last year.
Mumbai, traditionally the highest taxpaying centre in the country, saw a near 50 per cent growth in advance tax paid by the top 100 companies in the zone.
Sources said the advance tax figures showed that banks, hospitality and software are doing better than sectors like automobiles and cement.
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