Friday, October 26, 2007

Tax payments of telecom, auto cos dip

Advance tax payments by telecom and automobile firms for the second quarter this fiscal fell substantially, although the government received 30% higher taxes overall due to better showing by cement, realty and financial services companies.

“Telecom companies have paid 17.3% less taxes at Rs 535 crore against Rs 647 crore while the slowdown in sales of vehicles led to fall in tax collection from auto sector by 14% at Rs 771.6 crore against

Rs 897.1 crore in Q2 last fiscal,” official sources told agencies.Total advance taxes paid by September 15 rose by 30.2% to touch Rs 24,861 crore during the quarter, against

Rs 19,090.98 crore in the corresponding period of previous year. Corporates have to deposit 15% of their advance tax by June 15; 30% each by September 15 and December 15 and the remaining by March 15, based on their expected annual tax liability.

Sources said while Hutchison Essar (now Vodafone Essar), state-run MTNL and BSNL paid less tax, Sunil Mittal-led Bharti Airtel and Tatas-controlled VSNL paid more taxes. The telecom sector, which is adding more than 60 lakh connections every month, is expected to show good results, but the companies have claimed that they have increased investments to expand their network, sources said.

Faced with stagnating demand, major auto companies like Bajaj Auto, Tata Motors, Hero Honda, Mahindra & Mahindra, Hyundai Motors and Punjab Tractors lowered their advance tax payments in the second quarter. However, Maruti Suzuki, Daimler Chrysler, Volvo, Tafe and Ashok Leyland contributed higher taxes. Both Hero Honda and Bajaj Auto, which have announced their second quarter results ended September 30, saw an increase in their sales. However, Hero Honda's net profit declined.

The finance ministry has fixed a target of Rs 2,67,490 crore to be collected through direct taxes in the current fiscal. Sources said with continuing boom in housing sector, real estate firms and related sectors such as banking and cement also deposited more taxes. Tax payments by realty firms rose more than four-fold to Rs 345 crore by September 15 this year as against Rs 65 crore in the year-ago period.

Unitech, DLF, the Raheja group, Ambuja Cements and the Mangalam group were the top tax payers in construction sector, the sources said. Advance tax payments by insurance firms went up by 37.2% at Rs 1,520 crore as against Rs 1,108 crore during the same period last fiscal.

The energy sector, which is playing a key role in sustaining the growth of over 9% of economy, also increased its tax payments by around 32%, and deposited Rs 3,996 crore by September 15,
sources said.

With the success of “Incredible India” campaign, the hospitality sector doubled its tax payment to Rs 123.5 crore. Tax payments by print media and electronic channels nearly doubled to Rs 244 crore by September 15. Bennett Coleman & Co, Deccan Chronicle and Zee Entertainment were among the top advance tax payers, they said.

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