Economy

Top Mumbai firms pay 9% higher advance tax in Q1

Suresh P. Iyengar Mumbai | Updated on November 17, 2017

advance

The advance tax payment by top 100 Mumbai-based companies increased 9 per cent to Rs 10,100 crore in the first quarter ended June against Rs 9,279 crore in the same period last year. These companies account for about 35 per cent of the total direct tax collection.



Companies pay a portion of their estimated tax liability as advance tax.



This is paid a fortnight before the end of every quarter. A higher advance tax payout in the June quarter reflects better earning expectation of companies. Most companies anticipate an improvement in profitability with the recent fall in key raw material prices. Cost of borrowing may also come down if the RBI reduces bank rates in its review meeting on June 18. If the rate cut comes through, there is an expectation that it will boost demand across the board and revive economy.



OIL PSUs PAY MORE



HPCL, IOC and BPCL, which were in the eye of the storm for hiking petrol prices, paid advance tax during this quarter. The Government had given a bailout package of Rs 138,500 crore to these oil companies in the March quarter. While HPCL and BPCL remitted Rs 40 crore (Rs 60 crore) and Rs 70 crore (Rs 75 crore) as advance tax, IOC paid Rs 125 crore in June quarter after it skipped payment last year, according to sources in the Income-Tax Department.



In contrast to public sector oil companies, Mukesh Ambani-owned Reliance Industries, which was hurt by weak refining margins and declining gas output at its offshore fields, paid a lower tax.



Banks have paid higher tax despite concerns over credit quality and moderating investment activities. HDFC Bank paid Rs 500 crore (Rs 400 crore last year), Bank of Baroda Rs 315 crore (Rs 270 crore), Bank of India Rs 175 crore (Rs 270 crore), Union Bank Rs 192 crore (Rs 175 crore) and Union Bank Rs 192 crore (Rs 175 crore).



Among Tata Group companies, TCS enhanced its payout to Rs 320 crore (Rs 250 crore), while Tata Motors paid marginally lower tax at Rs 55 crore (Rs 60 crore). Tata Steel payment was marginally higher at Rs 270 crore (Rs 260 crore).



Aditya Birla Group companies, UltraTech paid a tax of Rs 110 crore (Rs 40 crore), Hindalco Rs 50 crore (Rs 70 crore) and Grasim Industries Rs 20 crore (Rs 30 crore). L&T paid lower tax of Rs 160 crore (Rs 180 crore)



>suresh@thehindu.co.in

Published on June 15, 2012

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