BRIEF OUTLINE ON THE PROVISIONS OF TAX DEDUCTED AT SOURCE (TDS), TAX COLLECTEDED AT SOURCE (TCS), AND CERTIFICATE OF FILING OF RETURN UNDER THE WEST BENGAL VALUE ADDED TAX ACT, 2003

BY KHALID AIZAZ ANWAR, JOINT COMMISSIONER, (HEAD) STDS CELL

  1. As we are all aware there exists a provision of TDS under the W.B.V.A.T. Act, where a person responsible for making payment to a contractor for execution of any works contract in West Bengal is required,while making payment to him,to deduct towards tax under sub-section (1) of section 40,barring any payment made in advance, an amount equivalent to such percentage as given in sub-rule (2) of rule 46XA of the W.B.V.A.T. Rules, 2005. The said percentage being 3% *(w.e.f. 01.04.2013) for works executed by a WBVAT registered dealer and 5% *(w.e.f. 01.04.2013) for work done by others. This provision shall be applicable till 30.09.2014 only.

*Prior to it the rate was 2% and 4% respectively

II. With effect from 01.10.2014 a provision of generation and issue of online Certificate of Filing of Return has been introduced. A registered dealer upon online transmission of his return for a quarter shall be able to generate such Certificate from the Directorate’s website following the electronic process explained therein. The person responsible for making the payment shall have to call for the said certificate as explained otherwise the amount of deduction shall have to be made at the rate as applicable to an Un-registered dealer. The relevant provision is given in rule 35A of the W.B.V.A.T. Rules, 2005.

  1. With the introduction of Certificate of Filing of Return, the deduction criteria as explained in Para I have also undergone a change and which is explained in the Table in page 2.

TABLE
DEDUCTION TO BE MADE U/S 40(1) W.E.F. 01.10.2014
(a) / REGD. DEALER WHO FURNISHES A CERTIFICATE OF FILING OF RETURN:
While making payment to THIS registered dealer [including a registered dealer paying tax at compounded rate u/s 16 or 18]. / 3%
(b) / REGD. DEALER WHO DOES NOT FURNISH A CERTIFICATE OF FILING OF RETURN:
While making payment to THIS registered dealer [including a registered dealer paying tax at compounded rate u/s 16or 18]. / 5%
(c) / Any un-registered dealer or dealer other than those stated in (a) or (b) above / 5%
  1. One more notable change that hasbecome effective from 01.10.2014 being insertion of a NEW provision “TAX COLLECTION AT SOURCE”, in short TCS. The said provision as

notified in the Govt. of West Bengal, Law Department, Legislative, Notification No. 440L dated 11.03.2014 (i.e. the West Bengal Finance Act, 2014) is reproduced below for perusal -

“Collection of tax at source. / 40A. (1) Notwithstanding anything contained in section 32 or any rules made

thereunderor any terms of a contract to the contrary,the person responsible for paying any sum for intra-state purchase of taxable goods from any dealer, wholly or partly in pursuance of a contract between such dealer and the Government or a local authority shall, at the time of payment of any sum to such dealer by any mode of payment, deduct towards tax payable under section 16 an amount equal to such percentage or percentages, not exceeding the rate specified in clause (b) of sub-section (2) of section 16, of such sum, and in such circumstances,as may be prescribed.

(2) The provisions of sub-section (2) to sub-section (6) of section 40 shall, mutatis mutandis, apply for collection of tax at source to be made in terms of this section.”;

  1. In brief the important features of “TAX COLLECTION AT SOURCE”, in short TCS,are:-

This provision applies to ALL Govt. departments and local authorities in the State of West Bengal.

At the time of payment to any supplier of taxable goods (all goods excepting Schedule A goods-list attached as per Annexure A)on or after 01.10.2014, the person responsible for such payment shall collect tax by way of deduction from his payment and deposit it at the Govt. ex-chequer.

The rate of deduction of TCS will be the same as stated in the TABLE above and the provisions stated therein shall also apply in Toto.

The procedure to be followed in respect of such collection and deposit shall be the same as is there for the purpose of TDSand as discussed in Para I and Para II.

Scroll in Form 19A as being furnished online for TDS today shall apply to TCS also.

If any Govt. department or local authority is not yet enrolled then it must immediately apply for enrolment through electronic process as given in our website

  1. Furthermore all payments related to TDS or/and TCSon or after 01.10.2014 will have to paid through Government Receipt Portal System (GRIPS) only.
  2. The most important advantage of making payment through GRIPS is that the Contractee shall not be required to submit the hard copy of the Scroll furnished online (Form 19A) at the STDS Cell at Beliaghata, Kolkata.
  1. In case of any query, clarification, etc please contact the following officers:-

Sl. / Name of the officer with designation / e-mail address / Mobile No.
I / Mr. Abhijit Dey, Deputy Commissioner / / 9830734920
II / Mr. Subrata Pal, Commercial Tax Officer / / 9883276638
  1. In case any organisation feels the need of any workshop on the above, the same can be arranged by the Directorate of Commercial Taxes. The request may be mailed at .

Brief outline on the provisions of TDS, TCS, etc under WBVAT Act, 2003Page 1