No advance tax paid by Satyam in FY09

Satyam Computer has not paid a single rupee as advance tax in the first three quarters of the current fiscal, though the IT company paid Rs 25 cr as fringe benefit tax (FBT) till December 15. However, most of its IT peers, including Infosys Technologies, Tata Consultancy Services (TCS), Wipro, Cognizant Technology Solution, Patni Computer Systems, Veritas Software, MphasiS, iGate Global Solutions, Cisco Systems and MindTree, have paid advance tax this fiscal, sources in finance ministry told SundayET. As payment of advance tax is always considered an indicator of profitability of a company, Satyam's non-payment of advance tax could also imply that trouble had been brewing for a long time. Though IT companies get some tax benefits under Section 10 (A) of the I-T Act, Satyam's zero payment of advance tax even as smaller companies coughed up the tax, has already raised questions in North Block. Various government agencies, including Central Board of Direct Taxes (CBDT), have begun investigations into the Hyderabad-based company after its chairman and founder Ramalinga Raju stepped down after confessing a Rs 7,000-cr fraud. A source in the finance ministry has, however, said advance tax payment should be seen along with the company's FBT and tax deducted at source (TDS) figures. "But yes, despite the slowdown, most IT companies have paid advance tax this fiscal whereas it's zero in case of Satyam," he added. Significantly, Satyam paid a meagre Rs 5.4 cr as advance tax last fiscal. Advance tax is paid four times a year and is paid on the basis of a company's projection of annual net profit. SundayET did not receive Satyam's TDS figures for the current fiscal. Satyam's FBT payment in Q3 too was below expectation of taxmen as it paid just Rs 5.5 cr against Rs 25 cr during the same period last fiscal, indicating that the company began to cut cost on fringe benefits extended to its employees. The total FBT collection as on December 17, 2008, stood at Rs 5,667 cr, registering a 43% rise from the same period in FY07, according to data available with CBDT. – www.economictimes.indiatimes.com