MVAT Act 31Chapter VII · Payment of Tax And Recovery

Section 31 · Deduction of tax at source

(1)

(a)

Subject to the provisions contained in clause (b), the Commissioner may, by a notification in the Official Gazette, subject to such conditions and restrictions as may be specified in the notification, require any dealer or person or class of dealers or persons (hereinafter in this section referred to as "the employer") to deduct the tax or such amount of tax as may be specified in the notification, payable on the purchases other than the purchases to which section 8 applies, effected by them in the period or periods specified in the said notification.

Explanation. - For the purposes of this section, the tax payable on purchases shall mean the sum collected separately from the said employer by way of sales tax by the supplier on the corresponding supplies effected by him in the said period or periods and the deduction is to be made from the sums payable to the supplier on account of the said supply.

(b)

(i)The Commissioner may by a like [Notification] [Notification for Employer for the purpose of deduction of tax at source in respect of Works Contracts, dated 29th August, 2005.] require any class of employers to deduct tax or such amount of tax as may be specified from and out of the amount payable [upto the 31st December 2018] [Inserted by Maharashtra Act No. 26 of 2018, dated 31.3.2018.] [(excluding the amount, if any, separately charged as tax or service tax levied by the Government of India, by the contractor)] [These words were substituted for the words '(excluding the amount of tax, if any, separately charged by the contractor)' by Maharashtra 32 of 2006, Section 46(a)(i), (w.e.f. 20-6-2003).] by such employer to a dealer to whom a works contract has been awarded, towards execution of the said works contract:

Provided that, the quantum of such deduction shall not exceed the quantum of tax payable towards such works contract:Provided further that, no deduction shall be made from any payment made to any sub-contractor by a principal contractor where the principal contractor has assigned the execution of any works contract, in whole or in part, to the said sub-contractor:Provided also that, no deduction as provided under this clause shall be made in respect of any sale or purchase to which section 8 applies.Explanation.- Where any payment in the nature of an advance payment, towards the execution of a works contract is made by an employer to a dealer and such amount is adjustable against the total contract value payable to the said dealer, then, for the purposes of this clause, the advance payment shall be deemed to be the amount paid towards the execution of the works contract only as and, when such advance payment is adjusted, in part or otherwise, against the total amount payable towards the works contract.

(ii)

[ Where on an application being made by any contractor in this behalf, the Commissioner is satisfied that the contract under reference is not a works contract and therefore justifies no deduction at all, he shall grant him such certificate: [[Sub-clause (ii) substituted by Maharashtra 32 of 2006, Section 46(a)(ii), (w.e.f. 20-6-2006). Prior to its substitution read as under:

(ii)Where on an application being made by any contractor in this behalf, the Commissioner is satisfied that the contract under reference is separable and involves both a works contract and labour or is not a works contract and therefore justifies deduction of tax only as a part of the sum payable in respect of any works contract or, as the case may be, justifies no deduction at all, he shall grant him such certificate as may be appropriate:

Provided that, the Commissioner 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.]]Provided that, the Commissioner may, after giving the contractor a reasonable opportunity of being heard, reject such application or cancel or modify such certificate:Provided further that, nothing in the said certificate shall affect the tax liability of the contractor.] [Added by Maharashtra Act No. 31 of 2017, dated 15.4.2017.]

(iii)

Where such certificate is produced by the contractor, before the employer, the employer shall, unless the certificate is cancelled or modified by the Commissioner, make deduction of tax in accordance with the said certificate. In the event of such certificate being cancelled or modified as provided, the employer shall make the deductions accordingly.

(2)

For the purpose of this section, where any amount of tax referred to in subsection (1) is credited to any account whether called the "suspense account" or by any other name, in the books of accounts of the employer, such crediting shall be deemed to be credit of such tax to the account of the employer and the provisions of this Act shall apply accordingly.

(3)

[* * *] [[Sub-section (3) deleted by Maharashtra 32 of 2006, Section 46(b), (w.e.f. 20-6-2006).Prior to its substitution read as under:

(3)Any registered dealer who Is not covered as an employer under the said notification may apply to the Commissioner for making the provisions relating to the employers applicable to him and subject to such, conditions and restrictions as may be prescribed, the Commissioner may, by order in writing, accept the request.]]

(4)

[ Any amount or any sum deducted in accordance with the provisions of this section and paid to the State Government may be claimed as a payment of tax by the person making the said supply and credit for the payment may be claimed by the said person in the period in which the certificate for payment is furnished to him by the person deducting tax in accordance with the provisions of this section.] [[Sub-section (4) substituted and deemed always to have been substituted by Maharashtra 32 of 2006, Section 46(c), (w/e.f. 20-6-2006).Prior to its substitution read as under: (4) Any amount or any sum deducted in accordance with the provisions of this section and paid to the State Government shall be treated as a payment of tax on behalf of the person making the said supply and credit shall be given to the said person in respect of the relevant period for the amount so deducted and paid on the production of the certificate furnished under this section.]][Provided that, any amount paid by an employer, in accordance with the provisions of this section to the credit of the State Government during the period starting on or after the 1st July 2017 and ending on the 31st December 2018, may be claimed as credit in the prescribed manner and subject to the prescribed conditions, by the person making the supply to the employer or the concerned sub-contractor (if any).] [Added by Maharashtra Act No. 26 of 2018, dated 31.3.2018.]

(5)

Any employer deducting any sum in accordance with this section, shall pay within the prescribed time, the sum so deducted to the credit of the State Government. If the employer does not deduct or after deducting fails to pay the tax as required by this section, he shall be deemed not to have paid the tax within the time he is required by or under the provisions of this Act to pay it and all the provisions of this Act including the provisions relating to interest shall apply mutatis mutandis to such unpaid tax.

(6)

The power to recover tax by deduction at source shall be without prejudice to any other mode of recovery.

(7)

Every person deducting tax in accordance with the provisions of this section shall within such periods as may be prescribed, furnish to the person to whose account the credit of the tax is to be given under this section, a certificate in the prescribed form.

(8)

[* * *] [[Sub-section (8) and (10) deleted by Maharashtra 32 of 2006, section 46(d), (w.e.f. 20-6-2006).Prior to its substitution read as under:

(8)Every employer shall, in the prescribed time, apply to the Commissioner for allotment of a sales tax deduction account number. The number shall be quoted in such documents, statements and returns as may be prescribed.

(10)

The employer shall within the prescribed time after the end of each year, file a return In such form and to such authority as may be prescribed. Any return filed on a floppy diskette, magnetic cartridge tape, CD-ROM or any other computer-readable media as may be prescribed, shall be deemed to be a return for the purposes of this section. While receiving the return on computer-readable media, the Commissioner shall carry out appropriate checks by scanning the documents filed on computer-readable media and the said media shall be duly authenticated by the Commissioner.]]

(9)

Where tax is deductible at source by any employer, the person making the said supply shall not be called upon to pay tax himself to the extent to which the tax has been deducted in respect of the said supply.

(10)[* * *] [[Sub-section (8) and (10) deleted by Maharashtra 32 of 2006, section 46(d), (w.e.f. 20-6-2006).Prior to its substitution read as under:

(10)The employer shall within the prescribed time after the end of each year, file a return In such form and to such authority as may be prescribed. Any return filed on a floppy diskette, magnetic cartridge tape, CD-ROM or any other computer-readable media as may be prescribed, shall be deemed to be a return for the purposes of this section. While receiving the return on computer-readable media, the Commissioner shall carry out appropriate checks by scanning the documents filed on computer-readable media and the said media shall be duly authenticated by the Commissioner.]]

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