In section 92 of the Nagaland Value Added tax Act 2005, the following

amendments shall be made, namely:-

1. (2) The heading of su-section (3) shall be substituted by the following, namely:- “(3) Special provisions to deduction of tax at source in certain cases.”
   • (b) After the heading, the existing sub-section (3) shall be numbered as clause (i).
   • (c) Inclause (i), the words “referred to in section 8” shall be substituted by the * words “ transfer of the right to use any goods, or sale or supply of any goods,”.
   • (d) After clause (i) of sub-section (3) of section 92, the following clauses shall be added, namely:- “(ii) (a). Where on an application being made by the contractor in this behalf, the Prescribed 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 service 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 such certificate as may be appropriate. Provided that the Prescribed Authority may reject such application, or on his own motion, cancel or modify such certificate, after giving the contractor areasonable opportunity of being heard.
   • (e) Where such certificate is produced by the contractor before the person shall, unless the certificate is cancelled or modified by the Prescribed 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. (iii) Any person 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 fifteen days from the date of signing of the contract such information as may be prescribed to the Prescribed Authority under whose jurisdiction the contractors place of business is situated. Failure to do so shall entail a penalty not exceeding five hundred rupees per day of default after affording such person a reasonable opportunity of being heard.
     • (iv) Notwithstanding anything contained in any other law for the time being in force, every person mentioned in clause (i) of sub-section (3) of section 92 responsible for paying sale price in respect of any works contract or lease or sale 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 or furnishes an undertaking for getting himself registered and any such contractor, lessor or seller or supplier who is not so registered under this Act shall not be paid by the said responsible person any amount in respect of the sale or supply, before he gets himself registered under this Act and submits an authenticated copy of the certificate of registration.
     • (v) Every person referred to in clause (i) of sub-section (3) of section 92 responsible for paying sale price shall, within the prescribed time, apply to the Prescribed Authority for allotment of a Value Added Tax deduction number. The number shall be quoted in such documents, statements and returns as may be prescribed.
     • (vi) No interest or penalty shall be imposed or no recovery proceedings against the dealer or payee shall be initiated in respect of deduction of tax under this section.”