In line with the rising fears that
economic slowdown and
higher interest rates will hit corporate profitability, India Inc's
advance tax payments for the quarter ending December 2011 (Q3 or third quarter of the fiscal), remained flat compared to the same quarter of the previous year.
About 30 out of 52 firms for which advance tax payment figures are available with MAIL TODAY, have paid more tax on Thursday than they did over a year back, while 21 have paid less than last year, leaving only Zee Entertainment, which paid the same amount this year as it did last year.
This reflects some
deterioration in advance tax payments against the September quarter.
During the last quarter, about 34 out of 47 firms paid more tax than they did over a year back, while 10 paid the same amount as they did last year, leaving only three in the negative pale.
Companies have to pay their estimated tax commitments arising till the 15th of the last month of every quarter in advance on that day, and for the remaining 15 days, they can pay by the quarter-end. Investors see corporate advance tax payments as an advance indicator of corporate profits during the quarter for taking their investment decisions.
Amid volatility, BSE Sensex slipped about 45 points on Thursday.
But the major worry was falling rupee and confusion over the impending Reserve Bank of India (RBI) action on Friday.
"The third quarter advance tax payments have put a mixed picture of India Inc. The numbers have showed that slowly the domestic and global economic conditions have started impacting the bottomline of companies," said Ashish Kapur, chief executive officer (CEO) of Invest Shoppe India.
Tax officials claimed that the top 100 firms in Mumbai paid 10 per cent more advance tax but the overall picture does not depict such a rosy picture.
"The banking major, State Bank of India, paid over six per cent lower advance tax compared to last year's quarter, while oil major, Reliance Industries Ltd (RIL) paid almost 16 per cent lower advance tax. Disappointment continued from the manu-
facturing firms and the capital goods companies," Kapur added.
Auto companies however, showed a mixed trend. While two-wheeler makers paid higher tax, cars and heavy vehicle majors paid lesser. Broking firms, domestic and global, paid less tax while a majority of the banking companies came up with higher advance tax payments.
Cement, pharma and FMCG companies paid up comparatively higher amounts this time.
Kishor Ostwal of CNI Research said, "The over-reaction of market has made meaningful analysis of advance tax co-relation to performance, insignificant."
Courtesy: Mail Today 
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