4. Insertion of new section 137a in the principal enactment

The following new section is hereby inserted immedi-ately after section 137, and shall have effect as section 137a, of the principal enactment :—

‘Deduction of turnover tax from payments.

1374, (1) Every person who makes any payment in pursuance of a contract to which he is a party or on behalf of any other person who is a party to a contract shall, whether or not such contract was entered into before the coming into operation of this section, deduct from such payment, business turnover tax which shall be a percentage of such payment at a rate to be prescribed by the Minister by Order published in the

Gazette and the amount of tax so deducted shall be a debt due from such person to the

Republic and shall be recoverable forthwith or may be assessed and charged upon such person in addition to any business turnover tax if any payable by him under this Part of this Act:

Provided that where the total considera-tion payable for the performance of such contract does not exceed five hundred thousand rupees no such deduction shall be made,

Any person who deducts business turn-over tax in accordance with the provisions of sub-section (1) shall—

issue to the person from whose pay-ment the deduction is made a statement showing—

the gross amount of such pay-ment

the rate and amount of tax so deducted

the net amount actually paid

remit within seven days of making such deduction the sum so deducted to the

the name and address of the person to whom the payment was made;

the gross amount of. such pay-ment;

the rate and amount of tax So deducted

the net amount actually paid.

Where the turnover of a person includes a sum from which business turnover tax has been deducted in accordance with sub-section (1), he shall be entitled on produc-tion of a statement relating to such sum issued in accordance with subsection (2) a set-off against the tax payable by him of the amount shown on such statement as the amount of tax deducted.

For the purposes of this section

any contract in respect. of. construction work of whatever nature

any contract for the supply of goods or services in respect of any con-tract specified in paragraph (i) ;

any sub-contract in respect of any contract specified in paragraph (i)

Any person who fails to deduct business turnover tax in terms of subsection (1) or fails to remit under subsection (2)

Any person who has made any deduc-tion under subsection (1) or any remittance in pursuance of subsection (2) shall be deemed to have acted under the authority of the person by whom the tax was payable and of all other persons concerned, and is hereby indemnified in respect of such deduc-tion or remittance, as the case may be,

Where any person has entered into two or more contracts and the Assessor, having regard to the nature and the parties to such contracts, is of opinion that the recipient of the payments made in respect of such contracts by such person is one and the same person or his. agent, the sum paid or payable shall be aggregated for the purposes. of. subsection. (1).’.