Slowdown hits corporate tax collection
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15% growth in tax collections in first quarter of fiscal year in Pune region against 18% target
The effect of economic slowdown and dip in net profits of companies is being felt in the slow growth of corporate tax collection this financial year. The growth in tax collections in the first quarter of current financial year in Pune region was nearly 15 per cent against the target of 18 per cent.
According to official figures, the corporate tax collected by quarter ending June 30 this year was Rs 2,169.5 crore against Rs 1,597.7 crore collected in the same period last year. Chief Commissioner of Income tax, Pune, R K Roye said though the number this year reflects higher growth than the target fixed by the department, the actual growth is less "due to large number of refunds'' that were cleared in the same period last year. He said if the money paid in refunds is taken into account, the actual growth is only 15 per cent against the target of 18.4 per cent. "The effect of slowdown is clearly visible," he said.
The corporate tax collection has been hit as major companies in the city, including those in manufacturing and project and engineering sectors, have witnessed a decline in their net income and profits. The total income of Thermax for quarter ending June 30, 2012, was Rs 983 crore against Rs 1,044 crore last year, a decline of 5.8 per cent. The dip is due to absence of any major capital investment by corporates, a Thermax spokesman said, adding that even government infrastructure projects have not taken off in a big way. "The sentiment in the economy is negative," he added.
Kirloskar Oil Engines (KOEL), a major manufacturer of engines, saw the net profit decline in the first quarter from Rs 43 crore in 2011 to Rs 39 crore. Both the net income and profit of Praj industries were also hit. The net income of the company was Rs 163 crore in the first quarter of 2012 against Rs 164.71 crore in 2011 while the net profit was Rs 12 crore against over 13 crore in 2011.
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