TDS ON WORKS CONTRACT UNDER TNVAT ACT

WHO ARE LIABLE TO DEDUCT

For the purposes of Works Contract TDS, a person who is liable INCLUDES :-

(i)                 Central/State Government,

(ii)               A local authority,

(iii)             A corporation or body established by or under a Central or State act

(iv)             A company incorporated under Companies Act,1956 including Central or state Government undertaking;

(v)               A society

(vi)             An educational institution ; or

(vii)           A Trust

 

WHEN TAX NEEDS TO BE DEDUCTED

Every person , as above, who are paying ay sum to any dealer for execution of works contract shall, AT THE TIME OF PAYMENT of such sum, deduct TDS at the rates as mentioned below :-

 

Type of Contract	% of WCT-TDS
Civil Works Contract	2% of the total amount payable to such dealer
Civil Maintenance Works Contract	2% of the total amount payable to such dealer
All other works contracts	5% of the total amount payable to such dealer

 

EXCEPTIONS

No deduction of tax shall be made in the following circumstances :-

(i)                 no transfer of property in goods is involved in the execution of such works contract , or

(ii)               transfer of property in goods is involved in the execution of works contract in the course of inter-state trade or commerce or in the course of import ; or

(iii)             the dealer produces a Certificate in Form "S" from the assessing authority that he has no liability to pay or has paid the tax.

(iv)             When the total payment does not exceed Rs. 1 Lakh per annum.

 

TIME LIMIT FOR DEDUCTION

The person making payment of WCT TDS shall deposit the sum so deducted to the assessing authority having jurisdiction over the person or to any other authority authorized (In Chennai :- TDS Circle, Greams Road) on or before 20th day of the succeeding month in which the deduction was made.

 

RELEVANT FORMS

 

Sl No	Nature of Form	Form No
1	Statement of Tax Deduction (to be filed by the person deducting tax)	Form R
2	Certificate (to be obtained by the dealer) for no deduction of WCT TDS	Form S
3	Certificate of TDS (to be provided by the person deducting tax)	Form T

TIME LIMIT FOR ISSUE OF TDS CERTIFICATE

 Any person who makes TDS and Depositing the same , shall within 15 days of such deposit, issue the dealer, a Certificate in Form T, for each deduction separately.

LATE PAYMENT

In case the amount of paid late, the person who is responsible for deduction of tax shall pay, in addition to the sum deducted, Interest @ 2% per month on TDS or the entire period of default.