Insertion of new section 43A

After section 43 of the Principal Act, the following new section 43A shall be added, namely,- "43A. Special provision relating to deduction of tax at source in certain cases- (1)(a) Every person other than an individual, a Hindu Undivided Family (HUF), a firm or a company not under the control of the Government, responsible for making any payment or discharging any liability on account of any amount purporting to be the full or part payment of sale price or consideration for the transfer of property in goods (whether as goods or in some other fath) involved in the execution of works contract shall, at the time of credit to the account of or payment to the dealer (hereinafter referred to as ‘Contractor’) of such amount in cash, by cheque, by adjustment or in any other manner, whatsoever, deduct in the prescribed manner and at the prescribed rate. (b) (i) Where on an application or online application being made by any contractor in this behalf, the Tax Authority is satisfied that any works contract under reference is separable and involves both transfer of property in goods and labour and services, or involves only labour and services and accordingly, justifies deduction of tax on a part of the sum payable in respect of any works contract or, as the case may be, justifies no deduction of tax at all, he shall, after giving the contractor a reasonable opportunity of being heard, grant him a certificate as may be appropriate: Provided that the Tax Authority may reject such application, or on his own motion, cancel or modify such certificate, after giving the contractor a reasonable opportunity of being heard: Provided further that nothing in the said certificate shall affect the tax liability of the contractor. (ii) Where such certificate is produced by the contractor, before the person responsible for payment, such person shall, unless the certificate is cancelled or modified by the Tax Authority, make deduction of tax in accordance with the said certificate. In the event of such certificate being cancelled or modified as provided, such person shall make the deductions accordingly. (c) Any person mentioned in clause (a) of this sub-section entering into any contract with any contractor for transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract shall furnish within thirty (30) days from the date of signing of the contract such information as may be prescribed to the Tax Authority. (2) Every person other than an individual, a Hindu undivided Family, a firm or a company not under the control of the Government responsible for making any payment or discharging any liability on account of any amount purporting to be full or part payment of sale price or consideration for the transfer of the right to use any goods for any purpose, at the time of credit to the account of or payment to the payee of such amount in cash, by cheque, by adjustment or in any other manner, shall deduct an amount calculated at the rate as specified in the schedule. (3) Every person responsible for paying sales price or consideration or any amount purporting to be the full or part payment of sale price or consideration in respect of any sale or supply of goods liable to tax under this Act to the Government or Corporation, Board, Authority, Undertaking or any other body by whatever name called, owned, financed or controlled wholly or substantially by the Government, at the time of credit to the account of or payment to the payee of such amount in cash, by cheque, by adjustment or in any other manner, whatsoever, shall deduct an amount calculated at the rate as may be specified in the Schedule from total sale price of such sale or supply. (4) Notwithstanding anything contained in any other Law for the time being in force, every person mentioned in sub-section (1), sub-section (2) and sub-section (3) responsible for paying sale price in respect of any works contract or lease or sale or supply of goods shall not enter into such transaction unless the contractor, lessor or seller or supplier, as the case may be, produces an authenticated copy of the certificate of registration under this Act. (5) Every person referred to in sub-section (1), sub-section (2) and sub-section (3) responsible for paying sale price, shall within the prescribed time apply to the Tax Authority for allotment of a Tax Deduction Account Number (TAN). The number shall be quoted in such documents, statements and returns as may be prescribed. (6) Any tax deducted under this section shall be paid into the Government account within such time and in such manner accompanied with such documents and statements of account as may be prescribed. (7) The person making any deduction of tax under this section and paying it into the Government account shall issue to the payee a certificate of tax deduction and payment in such form and manner and within such time as may be prescribed. (8) Any deduction made in accordance with the provisions of this section and credited into the Government account, shall be treated as payment of tax on behalf of the person and any amount deducted in excess of the tax so assessed or determined shall be refundable in accordance with the provisions of this Act. (9) The person responsible for deduction of tax shall within the prescribed time after the end of each year, file a return in the prescribed form to the Tax Authority. (10) No interest or penalty shall be imposed or recovery proceedings against the dealer or payee shall be initiated in respect of deduction of tax under this section. (11) If any person as referred to in sub-section (1), sub-section (2) and sub-section (3) fails to make the deduction or after making the deduction fails to deposit the amount so deducted into the Government account, the Tax Authority may, after giving such person a reasonable opportunity of being heard, by an order in writing, direct that such person shall pay, by way of penalty, a sum not exceeding double the amount of tax deductible but not so deducted and, if deducted not so deposited into the Government account."