(1) In the case of works contract on which tax is payable in accordance with the provisions of the Act whether an option under sub-section (8) of section 7 is made or not, the tax shall be paid by the Contractor in accordance with the rules.

(2) Every awarder making deduction from the payments made to a contractor under sub-section (7B) of section 7 shall pay the amount so deducted to the assessing authority with whom the contractor is registered as a dealer and if he is not so registered to the assessing authority having jurisdiction over the area where the works contract is executed by means of cheque or demand draft or by remitting the amount in the treasury in the name of the contractor and producing the chalan before such authority, along with a statement in Form 21C, on or before the fifth day of the succeeding month:

Provided that no amount shall be under sub-section (7B) of section 7 if there is no transfer of goods involved in the execution of the works contract or where the payment relates to that portion of a contract which does nor relate to transfer of goods involved in the execution of Works Contract  within the State.

(2A) (I) Every contractor/assessee shall file a declaration before the awarder with regard to the tax liability under clause (iv) of sub-section (1) of Section 5 or who has for payment of tax under sub-section (7) or (7A) of Section 7 of the Act, at the time of payment of contract amount including any advance payment.

(2) Every awarder shall collect quarterly certificate in Form No,. 21DD issued by the assessing authority showing the tax liability or the tax remittance as the case may be of the contractor/assessee up to the previous quarter from the contractor/assessee.

(3) The contractor/assessee shall file an application for quarterly certificate in Form No. 21D before the assessing authority and the assessing authority shall issue certificate in Form 21DD after verification.

Provided that if the contractor is not a registered dealer under the Act, the certificate may be obtained from the assessing authority having jurisdiction over the area in which the works contract is executed.

Provided that certificate issued under sub-rule (3) in Form 21DD shall be provisional and the contractor/assessee shall be liable to pay balance tax if any due after completion of the assessment.

(3) Notwithstanding anything contained in sub-rule (2) above, any contractor who pays tax regularly in accordance with the rules, on production of a certificate issue to that behalf issued by the assessing authority shall be entitled to payment of the contract amount without deduction of sales tax due on the contract for the period and to the extent or for the works contract specified in the certificate.

(3A) Any contractor may apply to the assessing authority in Form No. 21 CA for the issue of such a certificate. The assessing authority, if it is satisfied that the applicant complies with the requirement of sub-rule (3), may issue a certificate in Form No. 21 CB.

(4) Notwithstanding anything contained in sub-rule, (2), if the total turnover in respect of a contractor for a year does not exceed the assessable limit prescribed under section 5, the amounts  recovered and remitted by any awarder under sub-rule (2) for the period shall be refunded or adjusted as the case may be by the assessing authority.

(5) Any awarder who effect any payment of any contract amount without deduction of the amount prescribed under sub-rule(2), shall be liable to pay the said amount and shall be recovered from him as if it were a tax due from him. All provision relating to recovery of tax including provision relating to penalty and interest shall apply to such awarder as if he were a dealer liable to pay tax under the Act, irrespective of the limit of turnover prescribed under section 5.

(6) The amount deducted by the awarder from the payment due to the contractor and remitted under sub-rule (2) shall be adjusted against the amount finally assessed on the contractor under sub-rule (13) of Rule 21 and shall be dealt with in accordance with sub-rule (14) thereof.

Provided that this rule shall not apply to any contractor whose total turnover in a year does not exceed the assessable limit prescribed in section 5.

Provided further that when the contract amount does not exceed rupees fifty thousands in the year, the awarder may effect payment of the contract amount after getting a declaration in duplicate (one copy to be forwarded to the assessing authority) from the contractor to the effect that his total turnover for the year does not exceed rupees fifty thousand.