Corporates are postponing payment of advance tax resulting in a 10 per cent shortfall in collections in December compared to the same month last year. The overall growth in tax collections so far this year have also been slow compared to the targeted 35 per cent growth in tax collection for the fiscal.

Mumbai, which contributes a third of the country's total tax collections, has been the worst performer, recording a growth of just 16 per cent in advance tax collections for April-November 2008.

Mumbai tax officials pegged total advance tax collection in the circle, as of November, at Rs64,484 crore, up 16 per cent from the year-ago figure of Rs55,620 crore, but way below the 35 per cent target.

Of this, collection of advance corporate taxes stood at Rs40,732 crore and individual taxes stood at Rs17,847 crore while other taxes like tax on shares stood at Rs4,481 crore.

As per I-T rules, corporates have to deposit tax four times a year: on June 15, September 15, December 15 and March 15. They also have to file a self-assessment tax at the end of the year.

Self-assessment tax too has remained unpaid with as much as Rs1,100 crore still due. Even the tax deducted at source, which contributes about 30 per cent of the total tax collected from Mumbai has fallen short, as companies tend to utilise the money for own business purposes.

A major part of the government's tax revenue comes as advance tax collections and it is still not known how the government will find resources for all its bailout plans.

The I-T department too seems to have overlooked the current slowdown, highlighted by a negative growth in manufacturing output in October.