Section 35 in The M.P. Vanijyik Kar Adhiniyam, 1994
35. Deduction at source of tax payable by a contractor.
(1)Notwithstanding anything contained in any other provision of this Act, any person letting out a works contract of value exceeding one 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 per cent an amount towards the tax payable by the contractor under this Act. The amount so deducted shall be adjusted towards the tax assessed on such contractor under Section 27 and any amount that remains after such adjustment shall be refundable to the contractor.(2)On deduction of the amount at source under sub-section (1) the person making such deduction shall issue a certificate therefor to the contractor and shall deposit such amount into the Government treasury in such manner and within such time as may be prescribed.(3)Any person making a payment of the amount under sub-section (2) shall be deemed to have made the payment thereof on the authority and on behalf of the contractor and the treasury receipt for such payments shall continue a good and sufficient discharge of the liability of the person to the contractor towards the value of the contract to the extent of the amount specified in the receipt.(4)Where any payment of any amount is made by a person under sub-section (2) on behalf of a contractor such payment shall constitute a good and sufficient discharge of the liability of the contractor to pay tax in respect of the sale of the goods in the course of execution of the works contract from the payment of the value whereof such amount has been deducted under sub-section (1) and such amount shall be adjusted towards the tax payable by the contractor on the sale of such goods.(5)Where a person contravenes the provisions of sub-section (1) or sub-section (2) the Commissioner shall impose upon such person by way of penalty an amount which shall be twenty five per cent of the amount required to be deducted under sub-section (1).(6)Any amount, a person is required to deduct under sub-section (1) and to pay it into a Government treasury under sub-section (2) or the penalty payable under sub-section (5) remains unpaid shall be recoverable as an arrear of land revenue.Explanation. - For the purpose of this Section 'person' means-(i)Department of the Central or the State Government.(ii)Public Sector Undertaking.(iii)Municipalities and Municipal Corporation.(iv)[...] [The word 'Development' omitted by Section 7 of MP Commercial Tax (Second Amendment) Act, 1997 (No. 33 of 1997) w.e.f. 1-9-97.] Authorities constituted under any law for the time being in force.(v)Public limited companies.(vi)[ Non-governmental organisations.] [Inserted by by Section 7 of MP Commercial Tax (Second Amendment) Act, 1997 (No. 33 of 1997) w.e.f. 1-9-97.]
