The Hindu Business Line : Jaswant defends cut in interest on tax refunds

THE Finance Minister, Mr Jaswant Singh, today defended the Government's decision to slash the interest rate on tax refunds from eight per cent to six per cent.

"The Revenue Department is not a bank. This (practice) has to be stopped," he told the Rajya Sabha, which passed the Taxation Laws (Amendment) Bill, 2003 to replace the Ordinance that was promulgated earlier on September 8.

The Finance Minister said that many high-value assesses were paying huge advance tax amounts at the beginning of the fiscal to earn interest on refunds. The lowering of the interest rate on refunds would help curb this practice.

The Amendment Bill, which was cleared last week by the Lok Sabha, had also provided for lowering of tax on liquor at the source point (brewery) to one per cent.

This came following the 2003-04 Budget decision to levy 10 per cent tax on liquor at the exit point of the brewery, in order to check evasion.

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