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While the advance tax payment by LIC and Bank of Baroda has shown an improvement, L&T and General Insurance Corporation paid nearly the same amount as in the corresponding quarter last year
Mumbai: Advance tax payouts by leading Indian corporates mostly remained flat in the third quarter, suggesting that the slowdown is impacting their bottomlines, reports PTI.
While the advance tax payment by LIC and Bank of Baroda has shown an improvement, L&T and General Insurance Corporation paid nearly the same amount as in the corresponding quarter last year.
Advance tax payment is a clear reflection of the health of a company in particular and the economy in general and a lower payout indicates their lower profitability.
Companies pay advance taxes in four instalments. In the current quarter, they are bound to pay up 30% of their annual tax liability.
The largest financial institution, LIC, led the list of companies that paid up their advance tax this morning, with a spike in the amount to Rs1,200 crore from Rs1,070 crore a year ago, a senior income tax (I-T) official said here today.
However, the largest engineering and construction conglomerate L&T's payout was almost flat at Rs350 crore, versus Rs340 crore, while the third largest state-run lender, Bank of Baroda, saw its tax payout jump to Rs550 crore from Rs420 crore.
General Insurance Corporation, too, saw its tax liability go up marginally to Rs135 crore for the third quarter from Rs130 crore in the year-ago period.
According to the initial list, industry leaders like Reliance, Tata Motors, Tata Steel, TCS, Infosys, SBI, ICICI, HDFC and Mahindra & Mahindra are yet to make the payment, said the IT official, who requested not to be quoted.
Pharma major Pfizer paid higher advance tax of Rs300 crore for the third quarter this fiscal, as against Rs250 crore last year, and Novartis also paid more tax, at Rs200 crore versus Rs180 crore.
However, Glaxo India reported a lower advance tax payout of Rs80 crore for Q3, FY11-12, as against Rs90 crore in the corresponding year-ago period.
The list of companies that have made no advance tax payout is led by state-run oil marketers such as Indian Oil, which is the nation's largest corporation by revenue, Bharat Petroleum and Hindustan Petroleum.
The I-T official said oil companies normally do not pay advance taxes in the initial quarters, but in the last quarter, when the government pays them the subsidy compensation.
Central Bank of India saw its advance tax payment nosedive to Rs100 crore from Rs170 crore and so did Dena Bank, which paid only Rs60 crore for Q3, FY11-12, as against Rs70 crore in the corresponding period last year.
LIC Housing Finance fared comparatively better, with payment of Rs90 crore this year, as against Rs75 crore last year.
Significantly, despite the sharp slowdown in the manufacturing space, companies paid more taxes in this sector.
For instance, Tata Chemicals paid Rs70 crore in comparison to Rs60 crore last year and Tata Power paid Rs80 crore as against Rs60 crore, while Pidlite Industries—which manufactures and markets popular adhesive brand Fevicol— has paid Rs30 crore for Q3 this year, compared to Rs27 crore last year.
Alok Industries paid a tad less advance tax, at Rs32 crore, as against Rs35 crore last year.