Payment of tax at compounded rates by works contractor
(1) Notwithstanding anything contained in this Act, every dealer *other than the dealer who purchases goods from outside the state or imports goods from outside the country, may, at his option, instead of paying tax in accordance with section 5, pay, on the total value of the works contract executed by him in a year, tax calculated at the following rate, namely:-
|(i) Civil Works Contract Two percent of the total contract value of the civil works executed; (ii) Civil maintenance works contract Two percent of the total contract value of the maintenance works executed; (iii) All other works contracts Four percent of the total contract value of the works executed.|
(2) Any dealer, who executes works contract, may apply to the assessing authority along with the first monthly return for the financial year or in the first monthly return after the commencement of the works contract, his option to pay the tax under sub-section (1) and shall pay the tax during the year in the monthly instalments and for this purpose, he shall furnish such return within such period and in such manner as may be prescribed.
(3) The option exercised under sub-section (1) shall be final for that financial year.
(4) A dealer, exercising option under sub-section (1) shall, so long as the option remains in force, not be required to maintain accounts of his business under this Act or the rules made thereunder except the records in original of the works contract, extent of their execution and payments received or receivable in relation to such works contract, executed or under execution.
[Omitted…. (5) The dealer, who pays tax under this section, shall not be entitled to input tax credit on the goods purchased by him….Omitted]
*(5) The dealer who pays tax under this section shall not collect any amount by way of tax on purporting to be by way of tax and shall not be entitled to input tax credit on the goods purchased by him.
Explanation.- For the purpose of this section “civil works contract” includes civil works of construction of new building, bridge, road, runway, dam or canal including any lining, tiling, painting or decorating which is an inherent part of the new construction and any repair, maintenance, improvement or upgradation of such civil works by means of fixing and laying of all kinds of floor tiles, mosaic tiles, slabs, stones, marbles, glazed tiles, painting, polishing , partition, wall panelling, interior decoration, false ceiling, carpeting and extra fittings, or any manner of improvement on an existing structure.