The commissioner of taxes Nagaland, Dimapur has in the interest of public revenue, reproduced relevant provisions of the tax laws enforced in the state in regard to tax deducted at sources (TDS) for general information and strict compliance by all concerned.
According to an official bulletin, state commissioner of taxes also furnished the following responsibilities and duties of authorities/persons responsible for making payment of any sum towards works contract or supply of goods, that no authority/person responsible for making payment in respect of any works contract, lease or sale or supply of goods shall enter into such transaction unless the contractor, leaser or seller or supplier, produces a copy of VAT certificate or furnishes an undertaking for getting himself/herself registered.
Authority/person entering into any contract with any contractor for transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract shall furnish within 15 days from the date of signing of the contract to the responsible district superintendent of taxes, under whose jurisdiction the contractor’s place of business belonged.
No authority/person shall pay any amount in respect of the sale or supply to any contractor, leaser or seller or supplier before he/she gets himself/herself registered and produces an authenticated copy of the certificate of registration.
Any authority/person, DDO/HOD/AHOD etc., responsible for paying any sum to any dealer for execution of a works contract or supply of goods shall, at the time of payment of such sum in cash or by issue of a cheque or draft or any other mode of payment, deduct an amount towards tax as per the prescribed rate in respect of such works contract or supplies.
Meanwhile, tax rates on works contract would be kept at the option of the contractor to either pay by way of composite rate of 4% on the total value of the works contract, or pay at 12.5% on the total value of the works contract with deduction on account of labour and services charges subject to the maximum up to 40% of total value of the works contract.
The rate of tax on supply of goods shall be at the rate, as may be prescribed in the schedules by the state government from time to time
Any authority/person making such deduction (TDS) would be required to deposit the amount into the respective government treasury in form VAT-9 within 10 days from the expiry of the calendar month, during which such deduction is being made.
In case the authority/person making such deductions adopts “public works system of accounting”, such authority/person shall, within 10 ten days from the expiry of the calendar month during which such deduction is made, incorporate the sum so deducted in the “monthly divisional account statement” and send the statement to the Accountant General Nagaland, for transfer of the sum to the account under the head of account 0040-Sales Tax.
Authority/person making TDS shall issue a ‘certificate of deduction’ in Form VAT-32 within 15 days from date of deposit of such deduction in respect of such dealer.
The authority/person who deducts the amount towards payment of tax in respect of works contract or supplies shall, send to the commissioner of taxes Nagaland, Dimapur (i) a scroll in Form VAT-33, (ii) a copy of certificate of deduction issued to each dealer, and (iii) a copy of the receipted challan or a copy of the monthly divisional account statement, evidencing payment of the amount deposited during each month within 45 days from the date, following the date of expiry of the calendar month during which such deduction is made. Further, it has been informed that information or clarification could be had from any district taxes office.