Tax Deduction at source - Works Contract
22 - Payment of Tax
22(e) in the case of a dealer executing works contract or any other person notified by the Government from time to time, a tax at the rate of 4% for VAT dealers and at the rate of for TOT dealers, shall be deducted from the amount payable to him by the Central or State Government or an industrial, commercial or trading undertaking thereof or a local authority or a statutory body or a company registered under Companies Act 1956.
47. Special provisions relating to deduction of tax at source in certain cases
(a) Every person excluding an individual, a Hindu undivided family, a firm or a company not under the control of the Government responsible for making any payment or discharging any liability on account of any amount purporting to be the full or part payment of sale price or consideration for the transfer of property in goods (whether as goods or in some other form) involved in a works contract specified in Schedule-VI or for the transfer of the right to use any goods specified in Schedule-VII for any purpose, at the time of credit to the account of or payment to the payee of such amount in cash, by cheque, by adjustment or in any other manner, whatsoever, deduct tax therefrom in the prescribed manner at the rate, specified in the Schedule to the Act;
42. ADVANCE RECOVERY OF TAX FROM WORKS CONTRACTORS
(1) Notwithstanding anything contained in section 44 but subject to the provisions of section 6, every person, responsible for making any payment in discharge of any liability on account of valuable consideration payable in respect of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract shall be lawfully competent to deduct an amount at the rate or rates, not exceeding four percentum, specified by the State Government, in a notification published in the Official Gazette, purporting to be a part or full amount of tax payable on the sale of such goods from every bill or invoice raised by the works contractor as payable by the person and no such payment or discharge of any such bill or invoice raised by a works contractor shall be made without deduction as aforesaid.
Provided that, the State Government may prescribe the conditions subject to which no such deductions shall be made.
29. DEDUCTION OF TAX AT SOURCE
(1) Notwithstanding anything contained in this Act, any employer including the Government, the State Government, or an individual, or a commercial or trading undertaking of the Government or of the State Government, any Company registered under the Companies Act, 1956, any local authority or any person or dealer shall deduct tax from, and out of the amounts payable by such employer to a dealer to whom a Works Contract has been awarded involving transfer of property in goods (Whether as goods or in some other form), at the rate of 3% on half the value of the Works Contract undertaken by such dealer which shall be deemed to be on account of transfer of property of goods in the execution of such Works Contract.
Provided that, no such deduction shall be made where the amount or the aggregate of the amount payable to a dealer by such employer is less than fifty thousand rupees during a year.
25. SPECIAL PROVISIONS RELATING TO DEDUCTION OF TAX AT SOURCE IN CERTAIN CASES
(1) The State Government may, having regard to the prospect of recovery of tax, require in respect of any class or classes of dealers including contractors that any person including contractee making payment of valuable consideration to any such dealer or contractor for sale of goods in the State or execution of a works-contract involving transfer of property in goods in the State, shall, at the time of making payment to such dealer or contractor, whether by cash, adjustment, credit to the account, recovery of dues or in any other manner, deduct tax in advance therefrom at the rate not exceeding ten per cent of the amount paid in any manner, as may, by notification in the Official Gazette, be specified and different rates may be specified for different classes of dealers or contractors.
29. Deduction of tax at source.
29(b)(i) The Commissioner may by a like notification require any class of employers to deduct tax or such amount of tax as may be specified from and out of the amount payable (excluding the amount of tax, if any, separately charged by the contractor) by such employer to a dealer to whom a works contract has been awarded, towards execution of the said works contract:
Provided that the quantum of such deduction shall not exceed the quantum of tax payable towards such works contract:
Provided further that, no deduction shall be made from any payment made to any sub-contractor by a principal contractor where the principal contractor has assigned the execution of any works contract, in whole or in part, to the said sub-contractor.
Provided also that, no deduction as provided under this clause shall be made in respect of any sale to which section 8 applies.
Explanation.—Where any payment in the nature of an advance payment towards the execution of a works contract is made by an employer to a dealer and such amount is adjustable against the total contract value payable to the said dealer then, for the purposes of this clause, the advance payment shall be deemed to be the amount paid towards the execution of the works contract only when such advance payment is adjusted, in part or otherwise, against the total amount payable towards the works contract.
(ii) Where on an application being made by any contractor in this behalf, the Commissioner is satisfied that the contract under reference is separable and involves both a works contract and labour or is not a works contract and therefore justifies deduction of tax only as a part of the sum payable in respect of any works contract or, as the case may be, justifies no deduction at all, he shall grant him such certificate as may be appropriate.
26. Deduction and payment of tax in certain cases
26(2) Notwithstanding anything contained in any other provision of this Act, any person letting out a works contract of value exceeding three lac rupees to a contractor involving sale of any goods in the course of execution thereof by the contractor shall before making the payment of any amount towards the value of such contract to him, deduct at the rate of two percent an amount towards the tax payable by the contractor under this Act.
54. Deduction of tax at source from payment to works contractor
1. Notwithstanding anything contained in section --- or any other law or contract to the contrary, any person responsible for making payment of any sum to any contractor (here-in-after referred to in this section as ‘deducting authority’) for carrying out any works contract, which involves transfer of property in goods, in pursuance of a contract between the contractor and
a. the Central Govt. or any State Govt., or b. any local authority, or c. any authority or corporation established by or under a statute, or d. any company incorporated under the companies Act, 1956 including any state or Central Govt. undertaking, or e. any co-operative society or any other association registered under the Societies Registration Act, 1860,
shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or any other mode, whichever is earlier, deduct, subject to the certificate, if any, produced by the contractor in pursuance of sub-section (5), an amount towards Sales Tax equal to four percent of such sum in respect of the works contract, if the value of works contract exceeds rupees fifty thousand:
21-A Tax Deduction from the Amount Payable to Works Contractor
i) Notwithstanding anything contained in any of the provisions of this Act, every contractee responsible for making payment to any person (hereinafter in this Section referred to as the contractor) for discharge of any liability on account of valuable consideration payable for the transfer of property in goods (whether as goods or in any other form) in pursuance of a works contract shall, at the time of making such payment to the contractor either in cash or in any other manner, deduct an amount equal to two percentum of such sum towards part or as the case may be, full satisfaction of the tax payable under this Act on account of such works contract.
23. Payment of tax
(2) Notwithstanding anything contained in this Act, in the case of works contract, tax shall be deducted by the awarder at such rate not exceeding five per cent of the total value of the contract, in such manner and under such circumstances, as may be prescribed, from every bill of payment to a contractor and such sum shall be deposited or credited in the Government account within the specified time and in the prescribed manner.
34. MODE OF RECOVERY OF TAX DUE IN CERTAIN CASES: TAX DEDUCTION AT SOURCE
34(1) Notwithstanding anything contained in section- 22 and without prejudice to any other mode of recovery or payment or collection of tax due under this Act, but subject to other provisions under this section -
(A) Every person responsible for making payment to any dealer (hereinafter in this section referred to as the contractor) for discharge of any liability on account of valuable consideration payable for the transfer of property in goods (whether as goods or in some other form) in pursuance for a works contract, not being a building contract of such class or value as may be notified by the State Government in public interest in this behalf, shall, at the time of making such payment to the contractor, either by credit or in cash or in any other manner, deduct an amount equal to amount of tax payable by the contractor on the turnover of goods, determined in the manner prescribed under sub-section (3) of section 4 of the Act, in respect of taxable goods sold inside the State by way of transfer of property in goods (whether as goods or in some other form ) involved in the execution of works contract, towards full satisfaction of tax payable on sales of goods inside the State. Amount of tax to be deducted shall be computed in accordance with the rates of tax provided by or under sub-section (1) of section 4.
Provided that where the person responsible for making payments to the contractor is unable to ascertain the turnover of various goods involved in the execution of the works contract or if the contractor, for any reason claims that he is not liable to pay tax on turnover of sales inside the State of any taxable goods or that he is liable to pay as tax an amount lesser than the amount of deduction worked out on turnover of sales of taxable goods inside the State, the person responsible for making payment shall require the contractor to produce directions issued by the assessing authority of the contractor in this behalf and there upon on receipt of such directions, such person shall deduct such amount towards tax or, as the case may be, shall not deduct any amount towards tax, as may be mentioned in the directions issued in this behalf by the assessing authority on the application of the contractor.
Provided further that where any contractor has made deduction from the payments made to his sub-contractor in accordance with sub-section (5) the amount of such payments shall be deducted from the amount on which deduction is to be made under this clause.
1) Notwithstanding anything contained in sub-section (1) of Section 22, every person responsible for making payment to any dealer (hereinafter in this Section referred to as the contractor) for discharge of any liability on account of valuable consideration payable for the transfer of property in goods (whether as goods or in any other form) in pursuance of a works contract, not being a building contract of such class or value as may be notified by the State Govt. in public interest in this behalf, shall, at the time of making such payment to the contractor, either in cash or in any other manner, deduct an amount equal to four percent of such sum towards part or, as the case may be, full satisfaction of the tax payable under this Act on account of such works contract:
d that the assessing authority may, if satisfied that it is expedient in the public interest so to do and for reasons to be recorded in writing, order that in any case or class of cases no such deduction shall be made or, as the case may be, such deduction shall be made at a lesser rate:
Provided further that where any deduction has been made by a contractor from the payment made to his sub-contractor in accordance with sub-section (3), the amount of such payment shall be deducted from the amount on which deduction is to be made under this sub-section.