(1)Every person responsible for making payment to any person (here-in-after in this rule referred to as the contractor) for discharge of any liability on account of valuable consideration payable for the transfer of property in goods (whether in goods or in any other form) in pursuance of the works contract shall at the time of making such payment to the contractor either in cash or in any manner, deduct [VAT at the rate as notified by the Government from time to time] [Substituted vide the TVAT (First Amendment) Rules, 2011 (w.e.f. 17-08-2011).] of the gross amount of the bill towards tax payable in respect of all types of works under section 4(3) of the Act on account of such works contract [provided that till the Government notify the rate, the prevailing rate shall continue.] [Added vide the TVAT (First Amendment) Rules, 2011 (w.e.f. 17-08-2011).](2)Every person responsible for making payment to any person for discharge of any liability on account of valuable consideration payable for any transfer of the right to use any goods other than the goods in exempted list of the Act for any purpose (whether or not for a specified period) for cash or in any manner, shall at the time of making such payment deduct an amount [at the rate as notified by the Government from time to time] [Substituted vide the TVAT (First Amendment) Rules, 2011 (w.e.f. 17-08-2011).] of the payment on account of such transfer of right : [provided that till the Government notify the rate, the prevailing rate shall continue] [Added vide the TVAT (First Amendment) Rules, 2011 (w.e.f. 17-08-2011).] :Provided no such deduction shall be made from the bill (s) or invoice (s) of the transferer where the amounts received as penalty for defaults in payment or as damages for any loss or damage caused to the goods by the person to whom such transfer was made, and(3)The amount deducted under Sub-rules (l) and (2) shall be deposited into the Government Treasury by challan in Form XVIII by the person making such deduction within 7 day of the month following that in which the deduction is made.(4)The person making such deduction under sub-rule (l) and (2) shall, at the time of payment or discharge, furnish to the person from whose bill(s) and invoice(s) such deduction is made, a certificate in Form XI specifying the amount deducted and the rate(s) at which it has been deducted.(5)A copy of the challan showing the deposit of the amount referred to in subrule (3) shall be made over by the person making the deduction to the person from whom the deduction is made within 7(seven) days of such deposit.(6)The person making such deduction shall furnish to the Superintendent of Taxes, having jurisdiction over the area, a report of such deduction within 15(fifteen) days from the date of deposit of such amount in Form XI.(7)The person from whose bill (s) or invoice (s) the deduction was made shall furnish the returns along with the challan to the Superintendent of Taxes having jurisdiction over the area, in accordance with the provisions of the Rules.(8)All such deductions and deposits into the Government Treasury shall be deemed to be provisional payment of tax which shall be adjusted at the time of assessment under section 29 or 30 or 31 of the Act as the case may be.(9)Any deduction made in accordance with the provisions of this rule and credited into the Government Treasury shall be treated as a payment of tax on behalf of the person from whose bill(s) or invoice(s) the deduction has been made and credit shall be given to him for the amount so deducted as per deposit challan submitted to the Superintendent it of Taxes along with the returns in the assessment made for the assessment year.(10)If any person as is referred to in sub-rule (1) and (2) of this Rule fails to make deduction or after deducting, fails to deposit the amount so deducted as required by sub-rule (3) the Superintendent of Taxes may after giving such person opportunity of being heard, by order in writing, direct that such person shall pay, by way of penalty a sum not exceeding one and a half times the amount not so deducted and / or deposited into the Government Treasury.(11)Without prejudice to the provisions of sub-rule (10), 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 rates contained in section 44 of the Act, on the amount so deducted, and / or deposited from the date on which such amount was deductible to the date on which the amount is actually deposited.(12)Where the amount has not been deposited after deduction, such amount together with interest and penalty, if any, shall be recoverable from the person in default as an arrear of land revenue as per provision of sub-section (6) of section 37 of the Act.
