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Deduction of STDS and TCS during Payment to Contractor

Published in Commercial Taxes, Finance.

Government of West Bengal
Finance Department
Nabanna

No. 3910-F(Y) Dated, the 18th May, 2015.

MEMORANDUM

Under West Bengal VAT Act, 2003 all the Government Departments are required to recover STDS (sales tax deducted at source) and TCS (collection of tax at source) from the bills at the time of making payment to any dealer (contractor or supplier) at the following rates and deposit the same to the State Government under the head of account mentioned below.

2. The rate of deduction of STDS and TCS are as follows:-

i. 3 percent where the dealer is registered under the West Bengal VAT Act, 2003 and produces e-certificate of filing return obtained from the Commercial Tax website;

ii. 5 per cent where the dealer is registered under the West Bengal VAT Act, 2003, but does not produce e-certificate of filing return; and,

iii. 5 per cent where the dealer is not registered under the West Bengal VAT Act, 2003.

3. STDS is applicable in respect of any works contract, executed within West Bengal, which involves supply of materials and labour. However, it will not be applicable in the following cases.

i. in case of advance payment prior to commencement of any work; however, if any advance payment is made after commencement of work, with or without any bills from the contractor, STDS will have to be recovered at the appropriate rate.

ii. in case of payment to a contractor for executed work not exceeding Rs. 10,000 during a financial year, either against a single invoice/bill or against multiple invoices/bills.

iii. In case of payment on purely labour contract which does not involve supply of any material.

4. TCS is applicable in case of purchase of any goods taxable under West Bengal VAT Act, 2003 from any supplier located within the State of West Bengal. The important features of TCS are as follows:-

i. Recovery of TCS is mandatory for all Government Departments and local authorities within the State.

ii. In case of payment for purchase of any taxable goods i.e. all goods except Schedule-A items (list available in the website http://www.wbcomtax.gov.in or http://wbcomtax.nic.in) on or after 1st October 2014, the person responsible for such payment shall collect the tax by way of deduction from the claim bill of the supplier and deposit it to the State Government Account under the head of account mentioned below.

5. All the State Government Departments and local authorities are required to be enrolled for the purpose of STDS/TCS. If one is already enrolled for STDS, separate Enrolment Number for TCS is not necessary. In case any Government Department or Local Authority has not yet enrolled itself, it must immediately do so through electronic process in the website http://www.wbcomtax.gov.in or http://wbcomtax.nic.in.

6. The Head of Account Code for deposition of STDS/TCS is: 0040-00-111-001-35-WBVAT-Tax deducted at source.

7. In case of payments to be made by drawal of fund from the Treasury/PAO, the amount recovered from the bills of contractors/suppliers shall be transfer credited to the Government receipt head mentioned above and payment to the suppliers/contractors will be made by direct credit to the their respective bank account for the net amount. In such cases gross amount of the bill will be deducted from the allotment of fund, and two copies of duly filled challan in TR Form no. 12A for each recovery shall be submitted with the bill to the Treasurv/PAO. Format of TR Form no. 12A is given in the Annexure.

8. In case of any query the following officials may be contacted.

(i) Mr. Kaushik Chakraborty, Deputy Commissioner, stds.comtax@gmail.com. 03371221128.

(ii) Mr. Subrata Pal, Commercial Tax Officer, stds.comtax@gmail.com. 03371221130.

This order is issued in continuation of Finance Department No. FS-06/2015 dated 9th January 2015.

Sd/- H.K. Dwivedi
Principal Secretary to the
Government of West Bengal

No. 3910-F dated 18.05.2015, Source