Thursday October 11, 02:31 AM
Metal takes the shine off advance tax
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By Surabhi
Reflecting the recent slowdown in the infrastructure sector, advance tax collections by companies in the sector have seen a marked decline. An analysis of the top 30 tax paying companies cutting across all sectors show that companies in the metal and mining segment such as Tisco, National Aluminium (Nalco) and Hindalco have factored in a lower growth rate in their advance tax payments. These three are the top infra sector companies in the tax payers' list. The reduction in growth rate indicates they estimate a drop in their profitability level this fiscal. Overall ONGC tops the list of companies having paid the highest amount of advance tax at 2,401 crore. However, this is only a 17% increase over what it paid in the same installment last fiscal. Among the infra companies, Hindalco has seen a 46% drop in its advance tax payouts. The company paid a mere Rs 75 crore as the second installment this fiscal as compared to the Rs 140 crore it paid in September 2006. Similarly, Nalco paid Rs 180 crore as advance tax in September 2007, a 44% decrease over the Rs 320 crore it paid in September 2006. Tisco too expects a marginal drop in its profits and has paid Rs 445 crore as advance tax in the second installment - a 1% decrease over the Rs 450 crore it paid in the same period last fiscal. Other companies in the infrastructure sector too do not expect a significant rise in their productivity this fiscal. Hindustan Zinc expects a no-profit-no-loss scenario this fiscal and has paid Rs 500 crore, the same it paid as the second installment in September 2006. The second installment of tax by SAIL has risen only 20% to Rs 900 crore as against Rs 750 crore in September 2007. Similarly, National Mineral Development Corporation too expects modest profits in 2007-08 and has paid Rs 450 crore in the second instalment, just 17% increase over the amount it paid in September 2007. Firms pay advance tax on estimated earnings every year. Instead of paying a lump sum amount at the end of the fiscal, they break it down into four installments, the deadlines for which are June 15, September 15, December 15 and March 15. Slowdown in the infrastructure sector and a drop in industrial productivity has become a cause of concern for the government, which feels that this may lead to hamper economic growth. Industrial output stood at 7.1% in July this year as compared with 13.2% in the same month last year.
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