If advance tax collections for the second quarter (July-September) of 2010-11 are any indication, India Inc is set to report another good performance. While sectors like banking, finance and auto have done well, cement and pharma were down as compared to last year's numbers. The Mumbai region, which contributes a major chunk of direct tax collection, has clocked over 13 per cent growth in advance tax payments. The higher collection from top companies has come after India's industrial production growth at 13.8 per cent exceeded forecasts in July 2010 from a year earlier after a revised 5.8 per cent increase in June.
Companies pay advance taxes in four instalments throughout the year based on the business they are doing and hence, the advance tax payments made are seen as a barometer of the companies' performance. The Mumbai region of Income Tax Department has been assigned a direct tax collection target of Rs 1,50,480 crore for the current financial year, which is 35 per cent of the all India collection target of Rs 4,30,000 crore.
IT major TCS paid Rs 260 crore as advance tax as compared to the previous year's Rs 220 crore. Reliance Industries and Larsen & Toubro paid Rs 1,306 crore and Rs 280 crore respectively. RIL had paid Rs 1,157 crore in the year-ago period, indicating that it is steaming ahead. L&T's had paid Rs 210 crore in Q2 FY 10. Tata Steel has contributed Rs 500 crore to the nations tax kitty this quarter as compared to Rs 400 crore in the same quarter last year.
Similarly, Kumar Mangalam Birla-owned Hindalcos tax outgo doubled to Rs 140 crore. However, it was a mixed bag from the Tata Group as Tata Power Rs 60 crore and Tata Motors Rs 95 crore paid less to the exchequer vis-a-vis last year. Bajaj Auto paid Rs 243 crore as against last year period's Rs 170 crore, while Mahindra & Mahindra paid Rs 158 crore, up from Rs 112 crore, I-T sources said.
Barring some names, the banking and financial sector witnessed high tax payouts, led by State Bank of India (Rs 1,924 crore), ICICI Bank (Rs 600 crore), HDFC Bank (Rs 600 crore), Central Bank of India (Rs 206 crore), Union Bank of India (Rs 308 crore) and Yes Bank (Rs 105 crore). Home-loans lender HDFC shelled out Rs 400 crore this quarter, as against Rs 320 crore in the year ago period. Life Insurance Corporation's payout increased by Rs 128 crore to Rs 1,067 crore, while in the case of General Insurance Corporation, it almost doubled to Rs 92 crore.
The sector which appears to have suffered the most in Q2 FY11 since last year is cement, as payouts by a majority of companies in this segment have fallen sharply. From last fiscals Q2 of Rs 150 crore, Ambuja Cements advance tax payment fell to Rs 90 crore, while UltraTechs payout more than halved to Rs 60 crore.