Rs 300 cr FBT in first quarter

The much talked about fringe benefit tax is likely to fetch the government around Rs 300 crore (Rs 3 billion) in first quarter ended June 2005.

The estimated liability on the corporate sector is based on 210 companies that have provided information on FBT in its results for the quarter ended June 2005.

Many companies have not revealed the amount of FBT paid, but included in the tax provision made for the quarter ended June 2005.

The 210 companies have provided Rs 175 crore (Rs 1.75 billion) for FBT accounting for only 0.1 per cent of the sales for the quarter ended June 2005. The FBT of Rs 175 crore also accounted for a modest 1.75 per cent of the tax provision made by 210 companies.

The turnover of the corporate sector, including banks, is estimated to over Rs 400,000 crore (Rs 4000 billion) for the quarter ended June 2005.

The estimates are based on sales of Rs 388,138 crore (RS 3881.38 billion) achieved by the 2,865 companies during the quarter ended March 2005.

The 2,865 companies paid tax of Rs 14,449 crore (Rs 144.49 billion) in the March 05 quarter. Even if the companies paid FBT at 1.75 per cent of the corporate tax, the FBT estimated to be around Rs 275-300 crore (Rs 2.75-3 billion).

In the list of FBT payers, State Bank of India tops with FBT of Rs 85 crore (Rs 850 million), followed by TCS Rs 9 crore (Rs 90 million), ONGC Rs 8.77 crore (Rs 87 million), Steel Authority of India Rs 4.50 crore (Rs 45 million), ITC Rs 4.32 crore (Rs 43 million), CSES Rs 4.00 crore (Rs 40 million) and Tata Steel Rs 6.97 crore (Rs 69.7 million).

SBI, the largest FBT payee, so far has made a provision of Rs 85 crore as FBT which is accounted for 0.93 per cent of its revenues or a whopping 18.88 per cent of its tax provision made for the quarter ended June 2005.

The SBI earned revenue of Rs 9166.29 crore (Rs 91.66 billion) and made tax provision of Rs 450 crore (Rs 4.5 billionincluding FBT) for the June 05 quarter.

TCS paid FBT of Rs 9 crore, which is 0.40 per cent of its quarter revenue or 7.18 per cent of its tax provision made for the quarter ended June 2005.

FBT for ONGC and Sail accounts for 0.08 per cent of its quarterly sales. For Reliance Industries FBT accounts for 0.02 per cent of its quarterly sales.