Section-46. Tax deduction at source
(1) Notwithstanding anything
contained to the contrary in this Act, the Central or a
State Government may mandate, -
(a) a department or establishment of
the Central or State Government, or
(b) Local authority, or
(c) Governmental agencies, or
(d) such persons or category of
persons as may be notified, by the Central or a State
Government on the recommendations of
the Council,
[hereinafter referred to in this
section as “the deductor”], to deduct tax at the rate
of one percent from the payment made
or credited to the supplier [hereinafter
referred to in this section as “the deductee”] of taxable
goods and/or services,
notified by the Central or a State
Government on the recommendations of the
Council, where the total value of
such supply, under a contract, exceeds five lakh
rupees.
Explanation. – For the purpose of deduction of tax specified above,
the value of
supply shall be taken as the amount
excluding the tax indicated in the invoice.
(2) The amount deducted as tax under
this section shall be paid to the account of the
appropriate Government by the
deductor within ten days after the end of the
month in which such deduction is
made, in the manner prescribed.
(3) The deductor shall, in the manner
prescribed, furnish to the deductee a certificate
mentioning therein the contract
value, rate of deduction, amount deducted,
amount paid to the appropriate
Government and such particulars as may be
prescribed in this behalf.
(4) If any deductor fails to furnish
to the deductee the certificate, after deducting the
tax at source, within five days of
crediting the amount so deducted to the
appropriate Government, the deductor
shall be liable to pay, by way of a late fee,
a sum of one hundred rupees per day
from the day after the expiry of the five
day period until the failure is
rectified:
PROVIDED that the amount of fee
payable under this sub-section shall not
exceed five thousand rupees.
(5) The deductee shall claim credit,
in his electronic cash ledger, of the tax deducted
and reflected in the return of the
deductor furnished under sub-section (3) of
section 34, in the manner prescribed.
(6) If any deductor fails to pay to
the account of the appropriate Government the
amount deducted as tax under
sub-section (1), he shall be liable to pay interest
in accordance with the provisions of
sub-section (1) of section 45, in addition to
the amount of tax deducted.
(7) Determination of the amount in
default under this section shall be made in the
manner specified in section 66 or 67,
as the case may be.
(8) Refund to the deductor or the
deductee, as the case may be, arising on account
of excess or erroneous deduction
shall be dealt with in accordance with the
provisions of section 48:
PROVIDED that no refund to deductor
shall be granted if the amount deducted has been
credited to the electronic cash ledger of the
deductee.
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