Indian companies have a vast amount of money locked in disputed taxes , going by the numbers in the Centre for Monitoring Indian Economy (CMIE) database.
In financial year 2011/12, the 30 companies that make up the Bombay Stock Exchange Sensex saw money locked in disputed taxes rise 27 per cent to Rs 42,388 crore. A year earlier, that figure amounted to Rs 33,393 crore, according to the database.
In a written reply to the Lok Sabha in August 2012, Minister of State for Finance SS Palanimanickam stated that 5,860 cases involving direct taxes and 2,855 cases involving indirect taxes were pending with the Supreme Court. Similarly, 29,650 direct taxes cases and 14,626 indirect taxes cases were pending with High Courts.
The resolution of these cases would unlock around Rs 1.2 trillion (as of 2011/12), going by the CMIE data. If that money was freed it would have a huge impact on the economy.
Schedule VI of the Companies Act, 1956, requires all listed companies to disclose disputed tax liabilities as part of their contingent liabilities. This does not impact their bottom line as the numbers are disclosed in the Annual Report as part of the 'Notes to Accounts'.
State-owned Oil and Natural Gas Corp (ONGC) tops the chart with Rs 7,948 crore of total disputed tax followed by another public sector unit (PSU), GAIL India Ltd, with Rs 6,285 crore.
Next come some heavyweights from the private sector: Tata Steel, Sterlite Industries, Maruti Suzuki, NTPC, Bharti Airtel, Mahindra & Mahindra, TCS and HDFC Bank.