Decoding Reliance Ind’s 3% effective tax rate
June 23, 2021
As Reliance Industries’ shareholders log onto the annual general meeting on Thursday, they will do so with satisfaction. After all, the company managed a 35 per cent growth in profits (₹53,739 crore) for 2020-21 in a pandemic year.
But what most may not know is that much of the bottomline growth is attributable not so much to excellent business performance as to unprecedented tax relief, reminiscent of the 1980s/90s when RIL paid zero tax.
Piffling Effective Tax Rate
On a pre-tax profit (after exceptional items) of ₹55,461 crore, RIL paid just ₹1,722 crore as tax. This is 87.5 per cent lower than the ₹13,726 crore provided for tax in FY20.