The advance tax
paid by the top 20 marquee companies grew over 47 per cent year-on-year during the second quarter of FY22 to Rs 27,210 crore from Rs 18,462 crore, on the back of hefty payments by Tata Steel, Oil and Natural Gas Corporation (ONGC), and lenders.
Tata Steel's advance tax
payment jumped 3,900 per cent to Rs 4,000 crore; it was followed by ONGC whose payment zoomed 662 per cent because of the surge in oil prices in the international market. It paid Rs 2,250 crore in the quarter ended September 15, 2021, against Rs 295 crore a year ago, official sources said.
On the other hand, heavyweights -- such as Reliance Industries and Tata Motors -- skipped payments for the second consecutive quarter in the current financial year by availing a provision that allowed them to carry forward losses, said a government official in the know. He added that companies are allowed to do so for six years under the Income Tax Act.
Top state-owned financial institutions, including State Bank of India (SBI) and Life Corporation of India (LIC), reported double-digit growth in their advance tax
payment. They paid Rs 3,834 crore (up 28.8 per cent) and Rs 3,171 crore ( up 12.8 per cent), respectively.
Other state-owned lenders, such as Punjab National Bank (PNB) and Canara Bank, too, paid relatively hefty amounts over the same quarter a year ago -- Rs 313 crore (up 123 per cent) and Rs 850 crore (up 41 per cent), respectively.
According to officials, the first instalment payments showed growth on account of a low base but upturn continued even in the second quarter, reflecting that the second Covid wave did not have much impact on growth and earnings of at least these companies. However, sectors like aviation and telecom -- burdened with losses -- have been showing nil payment for the past few quarters, they pointed out.
Automotive majors and fast-moving consumer goods firms, too, appeared to have gained from relaxation in lockdown measures and pent-up demand. For instance, the tax outgo of Hero MotoCorp and Maruti Suzuki grew 41 per cent and 13 per cent, respectively. Hero MotoCorp paid Rs 250 crore against Rs 177 crore a year ago; Maruti Suzuki paid Rs 340 crore this quarter.
FMCG companies, including Hindustan Unilever, Procter & Gamble, and Nestlé also were ahead in the tax outgo leaderboard, reporting growth of up to 67 per cent. The three paid Rs 822 crore (up 9.6 per cent), Rs 62 crore (up 67.5 per cent), and Rs 180 crore (up 2.9 per cent), respectively.
Technology giants, too, reported good numbers, owing to robust demand in order flows as the pandemic accelerated digitisation. TCS paid Rs 2,330 crore, a jump of 31 per cent; Tech Mahindra's outgo surged 22 per cent to Rs 430 crore. Infosys' number, however, showed a slight contraction of 3.7 per cent; it shelled out Rs 1,300 crore this quarter against Rs 1,350 crore in the same period a year ago.
NTPC, the state-run power generation firm, reported over 21 per cent growth and paid Rs 960 crore this quarter. On the other hand, Larsen & Turbo's outgo contracted 80 per cent to Rs 130 crore from Rs 675 crore a year ago.
Amid the vaccination drive and high demand for life-saving drugs, pharmaceutical majors showed positive growth. Payment by Cipla grew 4.3 per cent to Rs 240 crore. It was followed by Lupin that paid Rs 148 crore, over 8 per cent more than last year's. Dr Reddy’s reported growth of 1 per cent and paid Rs 106 crore in the second instalment.
The total advance tax collection in the July-September quarter stood at Rs 1.72 trillion, up 51 per cent over the corresponding period in FY21. As on September 22, the direct tax collection, net of refunds, stood at Rs 5.70 trillion.
Companies and individuals are required to pay 45 per cent of their tax liability until the second quarter of the financial year.
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