thanks to the general slowdown in the economy. This is the first time in the last five years that advance tax collection from Mumbai has fallen.
Advance tax collection from various industries in the April-December period have fallen 12% to Rs 40,600 crore, belying initial government estimates that the collections would at least increase by 20%. Last year, the collection in the same period grossed Rs 44,230 crore.
As per the advance tax figures up to December 26, the sectors which recorded a fall in collections include oil, petroleum, petroleum products, manufacturing, automobiles, pharmaceuticals, cement and others. However, industries that saw a considerable growth in tax outgo included banking, engineering and insurance sectors.
Tax collection by way of TDS (tax deducted at source) registered an increase of over 34% to Rs 29,000 crore, taking the total tax collection to Rs 83,400 crore. The rise in TDS collection marginally helped the department to offset the drop in advance tax collection and take the consolidated tax collection higher than the collections last December, said tax department officials.
For now, the total collection from Mumbai, including advance tax and TDS, is 6% more than that collected in the April-December period last fiscal year. This however, does not offer any solace to tax collectors as rate of growth in collection last year exceeded 60%.
The collection figures offer a grim picture as about 75% of the advance tax is collected in December, when the third of the four instalments of advance tax payment is due. So far, Mumbai has managed to collect Rs 83,400 crore, while the projection for the whole fiscal is Rs 157,000 crore.
This, according to tax officials, was largely due to the slow performance of corporates in most sectors. The oil sector recorded a 71% decline over last year's payments, while the software sector saw a 21% fall; pharmaceutical companies' tax fell 27% and cement by 23%. The tax outgo from domestic banks surged 34%, while revenue from foreign banks rose 23%. Tax collections engineering industry has risen 30%.
Collection via the securities transaction tax was another blow. STT figures which is a reflection of the dynamism of the stock market, plunged 32% to Rs 4,455 crore.
The projection for all India tax collection this fiscal year is Rs 4,00,000 crore, out of which Rs 157,000 crore is expected to be generated from Mumbai. Meeting the target is going to be difficult unless there is a dramatic improvement in the economic situation in the next couple of months, said tax officials. The department is currently exploring all available channels for meeting the target, they added.