Section 36A - Tax deducted at source. Rule 59 - Delhi Value Added Tax Act, 2004

1 [36A.Tax deducted at source. Rule 59- 2 [ (1) Any person, not being an individual or a Hindu undivided family, who is 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 of a works contract, for value exceeding twenty thousand rupees or such amount as may, by order in writing published in official Gazette, be notified by the Commissioner from time to time, 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 any other mode, whichever is earlier, deduct tax thereon at the rate of 8 [ four ] percent. 3 [ 9 [***] 12 [ Provided that the rate of deduction of tax (TDS) shall be 6% in case of sub-contractors not registered under this Act. ] (1A) 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 value exceeding twenty thousand rupees or such amount as may, by order in writing and published in official Gazette, be notified by the Commissioner from time to time, 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 works contract undertaken by the contractor, shall, at the time of such payment or discharge, in cash or by cheque or draft or any other mode, deduct an amount equal to 10 [ four ] percent of such payment or discharge, purporting to be part of full amount of the tax payable under this Act. ] 4 [ 11 [***] 13 [ Provided that the rate of deduction of tax (TDS) shall be 6% in case of sub-contractors not registered under this Act. ] (2) Where, on an application being made by the contractor in this behalf, the Commissioner is satisfied that any works contract involves both transfer of property in goods and labour and service, or involves only labour and service and accordingly, justifies deduction of tax on a part of the sum in respect of the works contract or, as the case may be, justifies no deduction of tax, he shall, after giving the contractor a reasonable opportunity of being heard, grant him such certificate and for such period as may be appropriate: Provided that nothing in the said certificate shall affect liability of the contractor to pay tax under this Act. (3) Where any such certificate is granted, the person responsible for making payment under sub-section (1) shall, until such certificate is cancelled by the Commissioner, deduct tax at the rate specified in such certificate or deduct no tax, as the case may be. (4) The amount deducted under this section shall be deposited into the appropriate Government treasury by the person making such deduction 5 [ before the expiry of fifteen days ] following the month in which such deduction is made in the manner as may be prescribed. (5) The person making such deduction under this section shall, at the time of payment or discharge, furnish to the contractor from whose bills or invoices such deduction is made, a certificate as may be prescribed in respect of the amount deducted, the rate at which it has been deducted and the details of deposit into the Government treasury. 6 [ (5A) If any person referred to sub-section (5) fails to furnish to the contractor the certificate of tax deduction at source within seven days of making payment or discharge; the person shall be liable to pay, by way of penalty, a sum of one hundred rupees per day from the day of making payment to the contractor or discharge until the failure is rectified: Provided that the amount of penalty payable under this sub-section shall not exceed twenty thousand rupees. ] (6) Any deduction made in accordance with the provisions of this section and credited into the appropriate Government treasury shall be treated as payment of tax on behalf of the person from whose bills or invoices the deduction has been made, and he shall claim the adjustment towards the payment of output tax of the amount so deducted in his return for the tax period in which certificate of such deduction was issued to him. (7) A dealer claiming adjustment in his tax return of the amount deducted under this section shall preserve the certificate issued to him for a period of seven years and shall produce the same to the Commissioner on demand. (8) If any person as is referred to in this section fails to make the deduction or, after deducting fails to deposit the amount so deducted as required in this section, the Commissioner may, 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 besides tax deductible but not so deducted and, if deducted, not so deposited into the appropriate Government treasury. (9) Without prejudice to the provisions of sub-section (8), if any person fails to make deduction or, after deducting, fails to deposit the amount so deducted, he shall be liable to pay simple interest at the annual rate to be notified by the Government 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 into the appropriate Government treasury. (10) Where the amount has not been deposited after deduction such amount together with interest and penalty referred to in sub-section (8) and sub-section (9) shall be a charge upon all the assets of the person concerned and recoverable as arrears of land revenue. (11) Every person responsible for making deduction of tax under this section shall apply to the Commissioner for a Tax Deduction Account Number within the prescribed time and in the prescribed form and shall also furnish a return in the prescribed form within the prescribed period 7 [ and in the manner as may be notified by the Commissioner ] : Provided that, unless intimated otherwise by the Commissioner, every person having obtained Tax Deduction Account Number under the Delhi Sales Tax on Works Contract Act, 1999 (Delhi Act 9 of 1999) shall be deemed to have obtained a Tax Deduction Account Number under this Act and shall use the same Tax Deduction Account Number under this Act. (12) Any person who fails to comply with the requirement under sub-section (11) shall be liable to pay, by way of penalty, a sum of two hundred rupees per day from the day on which requirement arose until the failure is rectified: Provided that the amount of penalty payable under this sub- section shall not exceed twenty thousand rupees. Explanation : Nothing contained in this section shall apply to works contract executed in the course of inter-state trade or commerce or outside the state, or in the course of import into or export out of India. ] ----------------------------------------------- Notes:- 1. Inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005, w.e.f. 01.04.2005. 2. Substituted vide DVAT (Second Amendment) Act, 2005; No.F.14(29)/LA/2005/333, Dated 16.11.2005 ., w.e.f. 16.11.2005. before it was read as:- (1) Any person, not being an individual or a Hindu undivided family, who is 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 of a works contract, 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 any other mode, whichever is earlier, deduct tax thereon at the rate of two percent . 3. Added vide Notification no. No. F. 14(5)/LA-2010/1aw1359, dated 31/12/2010 4. Inserted vide Notification no. No. F. 14(5)/LA-2010/1aw1359, dated 31/12/2010 5. Substituted vide DVAT (Second Amendment) Act, 2005; No.F.14(29)/LA/2005/333, Dated 16.11.2005 ., w.e.f. 16.11.2005. "before the expiry of twenty eight days" 6. Inserted vide DVAT (Second Amendment) Act, 2005; No.F.14(29)/LA/2005/333, Dated 16.11.2005 ., w.e.f. 16.11.2005. 7. Inserted vide Notification No.F.14(6)/LA-2012/cons2law/61, Dated 15.06.2012 , w.e.f. 18.06.2012. 8. Substituted vide Notification No.F.14(13)/LA-2012/law/179., dated 28.12.2012 , before it was read as:- two 9. Omitted vide Notification No.F.14(13)/LA-2012/law/179., dated 28.12.2012 , before it was read as:- Provided that the rate of deduction of tax (shall be 4% in case of contractors not register under this Act. 10. Substituted vide Notification No.F.14(13)/LA-2012/law/179., dated 28.12.2012 , before it was read as:- two 11. Omitted vide Notification No.F.14(13)/LA-2012/law/179., dated 28.12.2012 , before it was read as:- Provided that the rate of deduction of tax (TDS) shall be 4% in case of sub-contractors not registered under this Act. 12. Inserted vide DVAT (AMENDMENT) ACT, 2013 (DELHI ACT 01 OF 2013) w.e.f. April 1, 2013. 13. Inserted vide DVAT (AMENDMENT) ACT, 2013 (DELHI ACT 01 OF 2013) w.e.f. April 1, 2013.