In exercise of the powers conferred by sub section (2) of section 20 of the Rajasthan Value Added Tax Act, 2003 (Act No.4 of 2003), read with sub-rule (2) of rule 40 of the Rajasthan Value Added Tax Rules, 2006, State Government hereby notifies that the awarder or any person authorised by him, at the time of credit of any sum to the account of the cotractor or at the time of making such payment by any sum to the account of the contractor or at the time of makiing such payment by any mode, for carrying out any work, shall deduct, in lieu of tax, an amount equal to 3% of such sum:

Provided that in case of contractors having exemption certificate under notification No.F.12(63) FD/Tax/2005-80 dated 11.8.2006, the awarder or any person authorised by him shall deduct in lieu of tax an amount equal to rate of exemption fee as mentioned in the said exemption certificate.

Provided further that in case of a contractor who are exempted from tax leviable in respect of transfer of property in goods involved in the execution of works contract under Notification No. F.12 (43) FD/Tax/05-36 Dated 24th August, 2007 no amount in lieu of tax shall be deducted by the awarder or any person authorised by him.

Provided also that in case of turnkey works contractor awarded by Rajasthan Rajya vidyut Utpadam Ltd., Rajasthan Rajya Vidyut Prasaram Nigam Ltd., Ajmer Vidyut Vitran Nigam Ltd., Jaipur Vidyut Vitran Nigam Ltd or Jodpur Vidyut Vitran Nigam Ltd., to a contractor and in pursuance of transfer of property in goods involved in execution of such works contract, the contractor has supplied the goods against VAT invoice to the awarder and such contractor furnishes proof of deposit of tax in State treasury in respect of such goods by himself or at an earlier points of sale in the State duly certified by the Assesing Authority, the awarder shall deduct an amount equal to the amount to be deducted at the rate notified above on the payment made to the contractor less the amount of tax paid in the State and if this amount has negative value, no tax deduction shall be made.

Provided also that in case of a turnkey works contract awarded by a Department of any Government, a corporation, a public undertaking, a cooperative society, a local body, a statutory body, an autonomous body, a trust, a private limited company or public limited company, having a separate contract for supply of goods, and in pursuance of such contract, the contractor claims that the sale of goods has occasioned in the course of inter State trade and commerce by the contractor to the awarder from outside the State, the Assessing Authority or an officer authorized by the Commissioner in this behalf on an application submitted by the said contractor, shall within ten days of receipt of such application, on being satisfied that the transaction of sale took place in the course of inter State trade and commerce, pass an order directing the awarder not to deduct the amount in lieu of tax from the payment of be made in this behalf. The order so issued shall be provisional in nature and applicable only for deduction of amount in lieu of tax under sub-section (2) of section 20 of the Rajasthan Value Added Tax Act, 2003, and shall be subject to assessment under the said Act.