18.Levy of tax on taxable contractual transfer price

(1)        Subject to the provision of sub section (2), the tax payable by a dealer, who is liable to pay tax under section 14 or sub section (3) of section 24 or sub section (3) of section 27C for transfer of property in goods involved in the execution of works contract, shall be levied on his taxable contractual transfer price

(a)        at the rate of four per centum, where goods represents those specified in section 14 of the Central Sales Tax Act, 1956; and  

(aa) at the rate of four percentum, where goods represent those involved in printing of materials; and

(b)        at the rate of thirteen decimal five zero per centum, where goods represents other than those specified in clause (a) or clause (aa).

(2) The expression “taxable contractual transfer price" for a period as stated at sub-section (1), shall mean, in the case of the dealer who is liable to pay tax on transfer of property in goods involved in the execution of a works contract under section 14 or sub-section (3) of section 24 or sub-section (3) of section 27C, that part of his intra-State contractual transfer price during that period which remains after deducting therefrom--

(a) contractual transfer of goods, sales of which are declared tax-free under section 21;

(b) charges towards labour, service and other like charges as may be prescribed;

(c) amounts paid to a sub-contractor for execution of the works contract , whether fully or in part, where the dealer claiming such deduction produces proof to the satisfaction of the Commissioner that –

(i) the sub-contractor is a registered dealer liable to pay tax under section 14; and

(ii) an invoice has been raised by such sub-contractor to such dealer for the amount claimed as deduction ; and

(iii)the amount of such transaction is included by such subcontractor in his return furnished under section 32 ; and

(iv) there is transfer of property in goods (whether as goods or in some other form) from such sub-contractor to the dealer in respect of such works contract ;

(d) such other contractual transfers as many prescribed:  

(3)        Where in respect of contractual transfer price referred to in clause (10) of section 2, the works contractor does not maintain proper accounts, or the accounts maintained by him are not found by the assessing authority to be worthy of credence, and the amount actually incurred towards charges for labour and other services, or profit relating to supply of labour and services, or the taxable contractual transfer price for applying proper rate of tax, are not ascertainable, such charges for labour and services, or such profit, or such taxable contractual transfer price shall, for the purpose of deductions, notwithstanding anything contained elsewhere in this section, be determined on the basis of such percentage of the value of the works contract as may be prescribed and different percentages may be prescribed for different types of works contract.

(4)        Notwithstanding anything contained elsewhere in this section, any registered dealer, who is liable to pay tax under section 14 or sub section (3) of section 24 or sub-section (3) of section 27C, for transfer of property in goods involved in the execution of works contract, and who is not engaged in-

(a)        making sale as referred to in sub clause (ii) of clause (g) of section 2 of the Central Sales Tax Act, 1956; or

(b)        making sale in the course of import of the goods into, or export of the goods out of, the territory of India within the meaning of section 5 of the Central Sales Tax Act, 1956; or  

(ba) reselling goods or

(c)        transferring goods otherwise than by way of sale for execution of works contract outside the State,

may, at his option, pay tax at such compounded rate not less than two per centum and not exceeding five per centum of the aggregate of the amount received or receivable by such dealer and subject to such conditions and restrictions as may be prescribed, for each month of the year in lieu of the amount of tax payable by him under sub section (1):

PROVIDED that such dealer shall not be entitled to issue tax invoice referred to in clause (48) of section 2 of the Act.