(1) Notwithstanding anything contained in this Act, every manufacturer of scheduled goods who is registered under the VAT Act shall in respect of sale of its finished products effected by it to a buying dealer, either directly or through an intermediary, shall collect by way of tax an amount equal to the tax payable on the value of such finished products under section 3 of this Act by the buying dealer or person in prescribed manner and shall pay the tax so collected into the Government Treasury :

Provided that the tax so payable by a manufacturer under this sub-section during a year shall be reduced by the amount of tax paid under this Act on the raw materials which directly go into the composition of the finished products during that year in the prescribed manner

Provided further that where a buying dealer, under the Rules providing for the rates of tax required to be specified with reference to section 3, is entitled to pay tax concessional rate or not pay any tax, as the case may be, in respect of such finished products, the manufacturer shall, on a declaration furnished by the buying dealer in the prescribed form, collect the tax at such concessional rate or shall not collect any tax, as the case may be .

Explanation - For the purpose of this section "manufacturer" shall include a person who is engaged in mining and sales, goods produced or extraced therefrom.

(2) Every manufacturer collecting tax under sub-section (1) shall reflect in returns submitted under sub-section (1) of section 7 the particulars of tax so collected alongwith the proof of payment of tax.

(3) The amount of tax collected under sub-section (1) and not paid as required under sub-section (2) shall for the purpose of section 11 be deemed to be an amount due under this Act.

(4) Every manufacturer collecting tax under sub-section (1) shall reflect the amount of tax collected under this section in the cash memo or sale invoice issued to the buyer.

(5) Collection and payment of tax in accordance with sub-sections (1) and (2) shall be without prejudice to any other mode of recovery of tax under this Act from the buying dealer and shall be subject to such adjustments as may be necessary on the completion of assessment of such buying dealer.

(6) If any manufacturer contravences the provisions of sub-section (1) or sub-section (2), the Assessing Authority may, after giving him an opportunity of being heard, impose on him by an order in writing, a penalty not exceeding twice the amount of tax required to be collected and paid by him.