How much does RIL contribute to the government tax pool?


At its Annual General Meeting on July 15, Reliance Industries Ltd (RIL) Chairman and Managing Director Mukesh Ambani said that RIL was one of the highest paid companies in India. This announcement has also been a feature of his speech to shareholders at previous general meetings. But what is the total proportion of taxes that the company pays to the public treasury?

Direct taxes

The corporate income tax (or corporation tax) bill has consistently contributed 1.7-1.8% in fiscal year 2016 to fiscal year 2019 to the Treasury. This is despite an almost 24% increase in the company’s income tax bill in fiscal 2019.

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However, in FY20, the proportion of RIL’s income tax expenditure on India’s computer collections (revised budget estimate of ₹6,10,500 crore) fell by nearly 30 basis points at 1.4%. This was due to a 30% decline in RIL’s income tax expense during the financial year caused by steady growth in consolidated net profit to ₹39,880 crore due to some one-off expense items during the quarter ended March 31, 2020.

Indirect taxes

In terms of indirect taxes, the company’s contribution to customs and excise duties steadily increased during FY16 to FY19. Its contribution to customs and excise duty collection increased from 4.8% of total government collections of ₹4,98,411 crore in FY16 to 7.5% of total government collections of ₹3,49,794 crore during FY19. But that proportion fell nearly 170 basis points in FY20 to 5.8%. The thing to note here is that the GST was introduced on July 1, 2017.


In terms of contribution to GST and value added tax, knowing the proportion of the contribution to the Center’s kitty becomes a bit difficult. Indeed, VAT is only collected by state governments on certain products identified as petroleum products, which are among the main products sold by RIL.

Even if we use GST and VAT data from fiscal year 2018 and compare it only with the GST collected by the Center, this proportion has increased from 9.6% of total GST collections (including tax) of the Center in FY 2018 of ₹4,42,561,000,000 at 11.6% cent of GST recoveries (including tax) of ₹6,12,327 crore in FY 2018-19. As with income tax and customs and excise, the proportion decreased by 30 basis points in fiscal 2020 to 11.3%.


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