Article PTI [TUESDAY, SEPTEMBER 09, 2003 07:55:11 PM] NEW DELHI: Income and corporate tax assesses will henceforth get a 6% interest on delayed refunds as against 8% they were entitled to earlier. They will also pay lower interest of 12% on delayed tax payments against the earlier rate of 15%. The revised interest rates have come into effect from September 8. The lower interest rates — payable to the assessse and chargeable from the assessee under various provisions of the Income-Tax Act, Wealth tax Act and Expenditure Tax Act — have come into force with the promulgation of the Taxation Laws (Amendment) Ordinance 2003 on September 8. The decision to align interest rate on refunds to the average rate of the 364 T Bill is expected to translate into annual savings of Rs 700 crore. Besides, corporate may not find it attractive anymore to park funds with the exchequer. The government has also taken the Ordinance route to reduce the rate on tax collection at source (TCS) on alcoholic liquor — which included country liquor and IMFL — from 10% to 1%. Sellers of alcoholic liquor will have to mandatorily collect a 1% tax at source from buyers on the sale price. Buyers, in turn, can claim credit later. The TCS rate on industrial scrap too has also been pruned to 1%. The revised TCS rates for timber and other forest produce and tendu leaves are 2.5% and 5%, respectively. Significantly, the government has also excluded public sector companies, central governments, clubs and embassies from the definition of buyers. Other changes made in the income tax legislation through the Ordinance are — inclusion of ship breaking in the exempted category in respect of interest payable in India and insertion of a new section 10 BA to provide for deduction of 100% of the profits derived from export of wood based handicraft items.