Section 51. Tax deduction at source.-
(1) Notwithstanding anything to the contrary contained
in this Act, the Government may mandate,-
(a) a department or establishment of the Central
Government or State Government; or
(b) local authority; or
(c) Governmental agencies; or
(d) such persons or category of persons as may be
notified by the Government on the recommendations of the Council, (hereafter in
this section referred to as "the deductor"), to deduct tax at the
rate of one per cent. from the payment made or credited to the supplier
(hereafter in this section referred to as "the deductee") of taxable
goods or services or both, where the total value of such supply, under a
contract, exceeds two lakh and fifty thousand rupees:
Provided that no deduction shall be made if the
location of the supplier and the place of supply is in a State or Union
territory which is different from the State or as the case may be, Union
territory of registration of the recipient.
Explanation .-For the purpose of deduction of tax
specified above, the value of supply shall be taken as the amount excluding the
central tax, State tax, Union territory tax, integrated tax and cess indicated
in the invoice.
(2) The amount deducted as tax under this section
shall be paid to the Government by the deductor within ten days after the end
of the month in which such deduction is made, in such manner as may be
prescribed.
1[(3) A certificate of tax deduction at source shall
be issued in such form and in such manner as may be prescribed.].
(4) 2[****]
(5) The deductee shall claim credit, in his electronic
cash ledger, of the tax deducted and reflected in the return of the deductor
furnished under sub-section (3) of section 39, in such manner as may be
prescribed.
(6) If any deductor fails to pay to the Government the
amount deducted as tax under sub-section (1), he shall pay interest in
accordance with the provisions of sub-section (1) of section 50, in addition to
the amount of tax deducted.
(7) The determination of the amount in default under
this section shall be made in the manner specified in section 73 or section 74.
(8) The refund to the deductor or the deductee arising
on account of excess or erroneous deduction shall be dealt with in accordance
with the provisions of section 54:
Provided that no refund to the deductor shall be
granted, if the amount deducted has been credited to the electronic cash ledger
of the deductee.
