10C. [ Tax deduction from the amount payable to works contractor. [Added Vide Act No. 7 of 1997.]
(1)Notwithstanding anything contained in any of the provisions of this Act, 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 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 per centum 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.(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 of 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 two per centum of such payment of 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.(3)The amount deducted under sub-section (1) or sub-section (2), shall be deposited into the Government Treasury by the person making such deduction in the manner prescribed.(4)Any deduction made in accordance with the provisions of this section and credited into the Government Treasury, shall be treated as payment of tax on behalf of the person from whose bills and invoices the deduction has been made and credit shall be given to him for the amount so deducted on the production of certificate prescribed in this regard, in the assessment for the relevant assessment year.(5)If any such person as is referred to in sub-section (1) or sub-section (2), fails to make the deduction, or after deducting such amount fails to deposit the amount so deducted, 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 deductable under this section but not so deducted and if deducted not so deposited into the Government Treasury.(6)Without prejudice to the provisions of sub-section (5), 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 eighteen per centum per annum on the amount deductable under this section but not so deducted, and if deducted, not so deposited from the date on which such amount was deductable to the date on which such amount is actually deposited.(7)Where the amount has not been deposited after deduction, such amount together with interest referred to in sub-section (6) shall be a charge upon all the assets of the person concerned.(8)Payment by way of deduction in accordance with sub-section (1) 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 purpose of this section assessing authority shall be construed such authority having jurisdiction over the place where the business or residence of the person making deduction of tax is located.]
