(1) Every awarder shall deduct from ever payment, including advance payments, made by him to any works contractor liable to pay tax under Section 6, in relation to any works contract awarded, the tax payable by the contractor in respect of such contract under that section, whether the transfer of goods involved in the execution of works contract is in the form of goods or not, and remit it to the Government, in the prescribed manner,on or before the twentieth day of the month succeeding the month in which such deduction is made. Every such awarder shall also file such return as may be prescribed.

Provided that in respect of works contract executed under the Sampurna Gramin Rozgar Yojana or the Beneficiary Committees using the Member of Parliament/Member of Legislative Assembly Funds or Natural Calamity Relief Funds of Sarva Siksha Abhiyan Funds, where the total amount in respect of individual contract does not exceed ten lakh rupees, the maximum amount deductable under this section shall not exceed five per cent of the whole contract amount.

(1A) Every person making any payment or discharging any liability to any person liable to pay tax under section 6 on account of any amount purporting to be the full or part payment of consideration for the transfer of the right to use any goods for any purpose shall deduct at source an amount calculated at the rate of four per cent from such sum towards full satisfaction of the tax payable under this Act in respect of the transfer of the right to use such goods and remit it to Government, in the prescribed manner, on or before the fifth day of the month succeeding the month in which such deduction is made. Every such person shall also file such return as may be prescribed.

(2) For the purpose of sub-section (1), the contractor may produce a liability certificate in relation to such work contracts from the assessing authority showing the tax liability or tax remittance, as the case may be, of the contractor in relation to the work.

(2A) In case where a liability certificate has been produced as per sub-section (2), payment shall be effected to a works contractor, on the basis of said certificate ;and,-

(i) in case of works awarded by Government of Kerala, Kerala Water Authority or Local Authorities, after deducting four percent of the amount paid as per the works contract: and

(ii) in other cases -

(a) after deducting eight percent of the amount paid as per the works contract in the case of contractors registered under this Act.

(b) after deducting ten percent of the amount paid as per the works contract in the case of other contractors:

Provided that the awarder shall not insists from the contractor, not being a dealer registered under the provisions of the Central Sales Tax Act, 1956 ( Central Act 74 of 1956) any certificate issued by the assessing authority showing the tax liability or tax remittance, as the case may be, of the contractor, in relation to the contract, if he has opted for payment of tax in accordance with the proviso to sub-clause (i) of the clause (a) of section 8.

(3) If any awarder or the person effects any payment without deduction of the tax as provided under sub-section (1) or (1A) or after making such deductions, fails to remit the same to Government within the time limit specified under the said sub-section, the awarder or the person and any person or persons responsible for such deduction on behalf of the awarder or the person, including a Director, Manager, Secretary or other officer of a company, shall be jointly and severally liable for payment of such amounts to the government forthwith as if it were a tax due from him.

Explanation.- For the purpose of this section:

(1) " company" means any body corporate and includes a firm or other association of individuals, or a Co-operative society; and

(2) "Director" in relation to a firm, means partner in the firm.