40. Information of a works contract and payment of tax relating thereto

(1) Where any contractor enters into a contract with any awarder involving transfer of property in the goods (whether as goods or in some other form), in the course of execution of a works contract and the gross value of such contract exceeds rupees five lac, the awarder shall furnish within one month from the date of the contract, the particulars of the contract in Form VAT-40 to the Assistant Commissioner or the Commercial Taxes Officer of the area where the office of such awarder is situated, or to any authorized officer as the case may be, and shall also send a copy of Form VAT-40 to the assessing authority of the contractor.

(2) Where in case of a works contract, the awarder or any person authorized by him, is a Department of any Government, a corporation, a public undertaking, a cooperative society, a local body, a statutory body, an autonomous body, a trust or a private or public limited company, and is responsible for payment of any sum to a contractor for carrying out any works, such awarder or the authorized person shall, at the time of credit of such sum to the account of the contractor or at the time of making such payment by any mode, deduct an amount as may be notified by the State Government in lieu of tax and shall issue a certificate of deduction of tax to the contractor in Form VAT-41.

(3)(a) Blank Forms VAT-41 shall be obtained by the awarder from the Assistant Commissioner or the Commercial Taxes Officer of the area where the office of such awarder is situated, or from any other officer authorized by the Commissioner, as the case may be, on payment of rupees fifty for each book containing twenty five forms.

Explanation. The Assistant Commissioner, the Commercial Taxes Officer or any other Officer authorized by the Commissioner as the case may be, who issues the Form VAT- 41 shall be known as the issuing authorities.

(b) For obtaining blank Form VAT-41 the awarder shall apply to the issuing authority stating his requirement of such Form and shall furnish such other particulars, information, statements and documents as may be required by the issuing authority for his satisfaction about the bona fide use of such Forms issued to the applicant on previous occasions and the bona fide purpose of applicants present requirement of such Forms.

(4) A deduction made under sub-rule (2) shall be adjusted against the tax liability created at the time of the assessment of the contractor.

(5) (a) The amount in lieu of tax deducted in sub-rule (2) shall be deposited by the awarder through a challan in Form VAT-37 in the Government account within fifteen days of the close of the month of such deduction. A monthly statement in Form VAT-42, mentioning the details of tax deducted and deposits of each contractor along with the duplicate copy of "Form VAT-41" shall be furnished to the issuing authority accompanied with Part IV of the challan within one month from the date of such deposits.

(b) Where an awarder fails to furnish the monthly statement as mentioned in clause (a) above, the issuing authority after affording a reasonable opportunity of being heard, may impose penalty under section 64 of the Act.

(c) The issuing authority after receiving the duplicate copy of Form VAT-41 shall verify the correctness of the deposits, and shall send the same immediately to the assessing authority of the contractor.

(6) Where the amount is not deducted as prescribed in sub-rule (2), the awarder or the person authorized by him shall be liable to penalty as provided for in the Act. In such cases the contractor shall be liable to pay the said amount together with interest at the rate provided for in the Act from the date of the receipt of the payment in any form by him.

(7) Where the amount is not deductible from the amount of payment made to a contractor under these rules or under orders of a court, the contractor shall deposit such amount like any other dealer in accordance with the notification issued under section 20.