(1) No deduction shall be made under Section 45 -

(a) if the dealer is not liable to pay tax under Section 14, 49 & 57 of the Act;

(b) if the supplier, being a dealer registered under Section 25 or 26 of the Act, produces before the deducting authority a certificate in Form JVAT 407 issued by the in charge of the circle in which he is registered.

(c) If the dealer is re-seller of the goods specified under Section 9(2) of the Act and where by notification, the tax has been levied and paid at the first stage of sale at the maximum retail price.

(2) Further; no deduction shall also be made under Section 44 -

(a) if the works contractor, in course of execution of works contract, involves such goods in the transfer of property in goods in the same form or in some other forms: and such goods are not liable to tax under Section 14, 49 & 57 of the Act; or

(b) if the works contractor, being a registered dealer: and has opted for composition of tax under Section 58 of the Act, and is registered in terms of Rule 4 of this Rule, and produces before the deducting authority a certificate in Form JVAT 407 issued by the in-charge of the circle; in which he is registered.

Provided that if Works Contractor, other than who is holding a registration certificate in JVAT 108, is filing returns regularly and paying the taxes within the prescribed time, the prescribed authority may issue a certificate in Form JVAT 407 for each of the work orders separately being executed after the approval of the Commissioner.

(3) A supplier or the works contractor, registered under the Act, for the purpose of obtaining the certificate in Form JVAT 407, shall apply for the same, in Form JVAT 120 online and the circle-in-charge after verifying the particulars furnished in the application, shall issue the certificate in Form JVAT 407 generated through departmental online system.

Provided that the prescribed authority shall issue a certificate in Form JVAT 407 after the approval of the Commissioner.

Provided further that the registered dealer executing Works Contract and applying in Form JVAT 120 for obtaining a certificate in Form JVAT 407 shall annex the copy of the work order.

(4) The provisions of sub rules (1) and (2) of Rule 23 shall apply mutatis mutandis in so far as they relate to deductions, deposits, returns and certificates.