Thursday, December 16, 2010

Advance tax payment surges; signals buoyancy

The higher advance tax payouts by India Inc reflect the buoyancy in economy.
Almost all major corporates across sectors have increased their outgo for the December quarter.
Within industry circle, the perception is that the momentum will continue despite the recent spate of political controversies.
The Centre had increased the direct tax target for this fiscal by 16 per cent to Rs 4,30,000 crore against the previous year's collections of Rs 3,70,000 crore.
In the backdrop of higher crude oil prices, Reliance Industries enhanced its payout by 42 per cent to Rs 1,191 crore (Rs 834 crore). Oil and Natural Gas Corporation paid an advance tax of Rs 2,742 crore, according to Income-Tax Department sources.
Banks are keeping a watchful eye on the changing situation given the slowdown in credit offtake and concern over liquidity squeeze.
The country's largest bank, State Bank of India's advance tax payout was marginally higher at Rs 1,850 crore (Rs 1,795 crore). This was also true for ICICI Bank at Rs 450 crore (Rs 301 crore) and HDFC Bank with Rs 750 crore (Rs 400 crore).
Tata Group companies — TCS, Tata Steel and Tata Motors — enhanced their tax outgo reflecting the growth in the respective sectors they operate in. Tata Motors more than doubled its payment to Rs 220 crore (Rs 100 crore). TCS, which recorded a profit of Rs 2,169 crore on a revenue of Rs 9,286 crore in the second quarter, improved its tax outgo by 30 per cent to Rs 230 crore (Rs 177 crore). Tata Steel paid Rs 1,000 crore against Rs 650 crore in the year-ago period on the back of firm demand, higher prices and improved production.
Kumar Mangalam Birla-owned Hindalco Industries, which has recently added fresh capacity, paid Rs 200 crore against Rs 148 crore in the same period last year.
Burdened by excess production and falling demand, cement companies were more conservative in their payments.
Holcim Group companies ACC and Ambuja Cement cut down their outgo substantially to Rs 40 crore (Rs 110 crore) and Rs 60 crore (Rs 140 crore). UltraTech Cement, which owns the cement business of Grasim Industries, paid a substantially higher advance tax at Rs 165 crore as against just Rs 90 crore in the year-ago period.
Two-wheeler major Bajaj Auto paid Rs 370 crore (Rs 310 crore). Mahindra & Mahindra's outgo rose to Rs 236 crore from Rs 195 crore in the same period last year.

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