Tax Deduction From the Amount Payable to Works Contractor

[Deduction of tax at source] (1) Notwithstanding anything contained in sub-section (2) of section 8A, 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 Government 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 per cent 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:
PROVIDED 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 payments made to his sub-contractor in accordance with sub-section (2) the amount of such payments shall be deducted from the amount on which deduction is to be made under this sub-section.
[Provided also that where the goods referred to in this sub-section are covered by section 3, 4 or 5 of the Central Sales Tax Act, 1956, no amount shall be deducted under this sub-section in respect of such goods]
[(1-A) Government/Semi-Government Departments, Corporations, Enterprise and Government Companies in case of purchasing goods from within the State, shall make deduction of tax amount at the time of making the payment to the seller against such purchase.]
(2) Any contractor responsible for making any payment or discharge of any liability to any sub-contractor, in pursuance of a contract with the sub-contractor, for the transfer of property in goods, whether as goods or in some other form, involved in the execution, whether wholly or in part, of the work undertaken by the contractor, shall, at the time of such payment or discharge, in cash or by cheque or draft or by any other mode, deduct an amount equal to four per cent of such payment or discharge, purporting to be a part or full amount of the tax payable under this Act on such transfer from the bills or invoices raised by the sub-contractor as payable by the contractor:
PROVIDED that no deduction under this sub-section shall be made on the amount on which deduction has already been made under sub-section (1);
5[(2-A) (i) Every person responsible for tax deduction at source, if not registered, shall submit an application for allotment of tax deduction number, to the assessing authority;
(ii) the tax deduction number shall be mentioned in all challans of deposit, certificates and all such documents, as may be determined by the State Government;
(iii) if any Government/Semi-Government Department, Corporation, Enterprise or Government Companies, etc., is not registered but is made responsible to make deduction at source under this section shall submit an application forth with for allotment of tax deduction number:
Provided that no person shall receive the payment till the amount of tax is deducted.]
(3) The amount deducted under 4[sub-section (1) or sub-section (1-A) or sub-section (2)] shall be deposited into the government treasury by the person making such deduction before the expiry of the month following that in which deduction is made.
(4) The person making such deductions under 4sub-section (1) or sub-section (1-A) or sub-section (2) shall, at the time of payment or discharge, furnish to the person from whose bills or invoice such deduction is made, a certificate in such form and manner and within such period as may be prescribed.
(4A) The person responsible for making the payment to the 4the seller shall submit such return of such payments at such intervals, within such period, in such form and verified in such manner, as may be prescribed, but the assessing authority, may, in its discretion, for reasons to be recorded, extend the date for the submission of the return by such person.
(5) Any deduction made in accordance with the provisions of this section and credited into the government treasury shall be treated as a payment of tax on behalf of the person from whose bills or invoices the deduction has been made, and credit shall be given to him for the amount so deducted on the production of the certificate, referred to in sub-section (4), in the assessment made for the relevant assessment year.
(6) If any such person as is referred to in 4sub-section (1) or sub-section (1-A) or sub-section (2) fails to make the deduction or, after deducting, fails to deposit the amount so deducted as required by sub-section (3), the assessing authority may, after giving to such person an opportunity of being heard, by order in writing, direct that such person shall pay, by way of penalty, a sum not exceeding twice the amount deductible under this section but not so deducted and, if deducted, not so deposited into the government treasury.
5[(6-A) If any person responsible for making tax deduction fails to apply for tax deduction number before making deduction, the assessing authority may, after giving him reasonable opportunity of being heard, by order in writing, direct that such person shall pay, by way of penalty, a sum not exceeding twice the amount deductible.] (7) Without prejudice to the provisions of sub-section (6), if any such person fails to make the deduction or, after deducting, fails to deposit the amount so deducted, he shall be liable to pay simple interest at the rate of [twelve per cent] per annum on the amount deductible under this section but not so deducted and, if deducted, not so deposited from the date on which such amount was deductible to the date on which such amount is actually deposited.
(8) Where the amount has not been deposited after deduction, such amount together with interest referred to in sub-section (7) shall be a charge upon all the assets of the person concerned.
(9) Payment by way of deduction in accordance with 4sub-section (1) or sub-section (1-A) or sub-section (2) shall be without prejudice to any other mode of recovery of tax due under this Act from the contractor or sub-contractor, as the case may be.
Explanation: For the purposes of this section, assessing authority means the officer having jurisdiction over the place where the place of business or residence of the person is located.