Levy of tax on transfer of property in goods involved in the execution of Works Contract

(1) Every dealer shall pay for each year, a tax under this Act on his taxable turnover for transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract determined at the rates specified for the same goods in the Schedules mentioned in section 12: Provided that all amounts towards labour charges and other like charges not involving any transfer of property of goods actually incurred in connection with the execution of works contract, shall be allowed to be deducted from gross turnover of such dealer in determining his taxable turnover (2) Where the dealer proves to the satisfaction of the prescribed authority that tax on the turnover of goods supplied by him in the course of execution of works contract, has been paid by his sub-contractor, the dealer shall not be liable to pay tax again on the turnover of such goods (3) Where a sub-contractor proves to the satisfaction of the prescribed authority that the tax leviable under sub-section (1) has, actually been paid by the dealer (his principal contractor) on the turnover of goods supplied to him by the dealer in the course of execution of works contract the sub-contractor shall not be liable to pay tax again on the turnover of such goods (4) A dealer shall pay for each year, a tax under this Act on his taxable turnover in respect of the right to use any goods (whether or not for a specified period) at the rates specified in the Schedules under section 12 for the same goods had they been sold otherwise than by the transfer of the right to use them: Provided further if the transfer of the right to use any goods is made by a dealer on more than one occasion in a year to the same or different party, the tax shall be leviable on each such occasion. Explanation I.- For the purposes of this section, the transfer of property in goods or transfer of right to use any goods for any purpose (whether or not for a specified period) shall be deemed to have taken place in Sikkim if the goods transferred are within the state at the time of their transfer or use application or appropriation for the execution of works contract, irrespective of the place where the agreement for the works contract is made and whether the consent of the other party, prior or subsequent to such use, application or appropriation has been obtained or not. Explanation II.- The levy of tax under this section shall be made whether the works contract is executed fully or partly during a year or abandoned or terminated before completion (5) Every person making any payment to contractors executing the works contract shall deduct such amount in the form and manner as may be prescribed as the tax deducted at source at two per cent or not exceeding eight per cent of the said amount, as the state Government may by notification determine