TAX
DEDUCTION AT SOURCE (TDS)
Under
Section 13 of the Tamil Nadu Value Added Tax Act, 2006, (i.e. Deduction of tax
at source in works contract), every person responsible for paying any sum to
any dealer for execution of works contract shall, at the time of payment of
such sum, deduct an amount calculated at the following rate, namely:--
(i)
|
Civil Works Contract
|
Two percent of the total amount payable to
such dealer
|
(ii)
|
Civil Maintenance Contract
|
Two per cent of the total amount payable
to such deler
|
(iii)
|
All other works contracts
|
Four per cent of the total amount payable
to such dealers:
(From 1.1.2007 to 9.3.2012)
Five per cent of the total amount payable to such dealers.
(From 10.3.2012 onwards) |
Every
person responsible for paying any sum to any dealer for execution of works
contract includes:
i)
the Central or a 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 the
Companies Act, 1956 (Central Act 1 of 1956) including a Central or State
Government undertaking
v)
a society including a co-operative
society;
vi)
an educational institution; or
vii)
a trust.
Civil or other construction works in Tamil
Nadu entrusted by any individual, firm, developer, builder, etc., to any
sub-contractor will fall under the ambit of civil works contact.
Works “other than civil works” mean contracts such as interior works,
annual maintenance contracts, electrical works contracts, machine repairs,
house-keeping contractors etc., with a value above one lakh rupees.
TDS REMITTANCE
Remittance to Commercial Taxes Department as per the provisions of
Section 13 of TNVAT Act, 2006, every person entrusting works contracts to
contractors should deduct tax at the rate of 2% on civil works or civil
maintenance works and at the rate of 5% on all works other than civil works at
the time of making payments and remit the tax deducted at source on or before
20th of every succeeding month in the respective assessment circles.
If any person or agency awarding such
works contract is not liable to be registered under TNVAT Act, they shall remit
tax deducted at source (TDS) from payments to their contractors in the
Commercial Tax circle within which they reside or function. In case of Chennai, TDS payments can be made
at TDS circle at Greams Road Commercial Taxes Office.
PENALTY FOR
FAILURE TO DEDUCT AND PAY TDS
Persons or
organizations who contravene the provisions and fail to deduct and remit the
tax, shall pay in addition to the amount required to be deducted and deposited,
penalty at 150% on taxes to be collected as TDS and interest at 2% per month on
such TDS payable for the entire period of default.
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.
EXEMPTION IN CERTAIN CASES
No deduction under sub-section (1) of Section 13 of the Tamil Nadu Value Added Tax
Act, 2006 shall be made where—
a) no transfer of property in goods (whether as goods or in some other
form) is involved in the execution of works contract; or
b)
transfer of property in goods (whether as goods or in some other form) is
involved in
the execution of
works contract in the
course of inter-State
trade or commerce
or in the course of import; or
c)
the dealer produces a certificate
in
such form as may be prescribed
from
the assessing authority concerned that he has no liability to pay or has paid the tax under section 5 of the Tamil Nadu Value Added Tax Act.
2006:
Provided further that no such deduction
shall be made under this section, where the amount or the aggregate
of the amount paid or credited
or
likely to be paid or credited, during the year, by such person to the
dealer for execution of the works contract including civil works contract
does
not or is not likely to, exceed rupees one lakh.
TAX DEDUCTION IDENTIFICATION NUMBER
(TDIN)
Under
Tamil Nadu Value Added Tax Act, 2006 a new Section has been inserted as shown
below:
13-A.
Tax Deductor Identification number:-- Any person liable to make deduction of
tax under Section 13 shall apply to such authority in such manner as may be
prescribed and shall obtain a tax deduction identification number.
DISCLOSURE OF TDS DETAILS IN THE
MONTHLY RETURNS
For this
purpose new Form YY has been prescribed which is available in ctd.tn.gov.in new portal under Tamil
Nadu Value Added Tax Act Forms.
The Tax
Deduction at Source (TDS) adjustment details and Tax due, adjustment made and
payable details were to be disclosed in Part E and Part F of Form K Monthly
return.
https://ctd.tn.gov.in/documents/10184/21612/Press+Release+No.453+-English/e675d8e4-19a5-459e-a6a4-f0dbb0abbd73?version=1.5
https://ctd.tn.gov.in/documents/10184/21612/Press+Release+No.453+-English/e675d8e4-19a5-459e-a6a4-f0dbb0abbd73?version=1.5