Financial sector forms a third of advance tax kitty

Without the banking, insurance and finance sector, the advance corporate tax kitty of the government would be reduced by more than one-third of the Rs 15,000 crore (Rs 150 billion) collected from the top 100 tax-paying companies.

A sectoral decomposition of these companies, including both public and private sector entities, show this category accounts for 46 firms contributing Rs 6,759 crore (Rs 67.59 billion) of the Rs 15,000 crore collected as advance corporate tax. The petroleum sector comes next with Rs 5,951 crore (Rs 59.51 billion) from eight companies, with the Oil and Natural Gas Corporation making up more than two-third of it.

The sunrise sector, comprising infotech and pharmaceuticals, with six companies in the list, paid Rs 318 crore (Rs 3.18 billion) during April-December 2002 as against Rs 209 during April-December 2001.

The fast-moving consumer goods sector performed a shade better with its four representatives among the top 100 accounting for Rs 458 crore (Rs 4.58 billion).

However, tax collections from the automobile sector doubled during the period from Rs 309 crore (Rs 3.09 billion) to Rs 600 crore (Rs 6 billion), while the fortunes of the mining sector also improved because of the turnaround in the Northern Coal Fields and the Mahanadi Coal Fields.

The revenue department collects the annual corporate tax for each fiscal in four instalments, with the first instalment payable in June. The next three instalments are paid by companies in September, December and March.

But the sectoral picture does not vary from year to year. During April-December 2001, the banking, insurance and finance sector contributed almost half of the total collection of Rs 11,000 crore (Rs 110 billion) at Rs 5,199 crore (Rs 51.99 billion).

Sectoral tax collection is boosted by the presence of public sector companies. For instance, in the mining sector, which accounts for Rs 1,229 of the corporate tax, public sector Neyveli Lignite Corporation, contributed Rs 375 crore during April-December 2002 as against Rs 221 crore (Rs 2.21 billion) in the same period of 2001. 

In the power sector, the National Thermal Power Corporation paid Rs 906 crore (Rs 9.06 billion) during April-December 2002 as against Rs 1,377 crore (Rs 13.77 billion) in the corresponding period of 2001. The tax collection from this sector consequently dropped to Rs 1,938 crore (Rs 19.38 billion) in 2002 from Rs 2,102 crore (Rs 21.02 billion) in 2001.

The fortunes in the telecommunications sector also dipped in 2002-03, with Mahanagar Telephone Nigam Ltd, Videsh Sanchar Nigam Ltd (VSNL) and Bharat Sanchar Nigam Ltd paying only Rs 915 crore (Rs 9.15 billion) as against Rs 1,208 crore (Rs 12.08 billion) in the previous fiscal.