(1) Every "small works contractor" (falling in category 'C' and 'D') engaged in the business of execution of the works within the State (hereinafter in this rule called "the works contractor") shall, under sub-section (2) of section 16 and subject to the provisions of rule 45 and this rule, at his option, pay the lumpsum on the transfer of property in goods (whether as goods or in some other form) involved in the execution of the work contract, by way of composition calculated at 4 percent of the taxable turnover for execution of each works contract awarded to him during a financial year.

(2) The works contractor opting to pay the lumpsum shall, within thirty days of award of the contract to him, make an application for allowing him to make payment under sub-rule (1) in the following form : -

Form of application

To

The Assessing Authority,

__________District ___________.

Subject: Option to pay the lumpsum by way of composition under sub-section (2) of section 16 of the Himachal Pradesh Value Added Tax Act, 2005.

Sir,

I, --------------------------- (name), aged -------(years), son of Shri ------------------------- resident of village ---------------, tehsil -------------, Proprietor/ partner/ manager/ managing director of M/s --------------------- holding TIN/GRN --------------- and doing business of execution of works contracts with effect from ___________ do hereby opt to pay lumpsum (in lieu of tax payable under the Act) by way of composition under sub-section (2) of section 16 of the Himachal Pradesh Value Added Tax Act, 2005 and rule framed thereunder on the transfer of property in goods (whether as goods or in some other form) involved in the execution of the works contracts given below: -

2. A copy of the contract or agreement alongwith its enclosures is appended to this application.

Signature of works contractor

Place -------------

Date --------------

ACKNOWLEDGEMENT

Received option from M/s -------------------------------------

(mention complete name and address with TIN/GRN, if any.)

Designation:

(3) The works contractor shall have to pay the lumpsum in respect of every works contract awarded to him after the exercise of option to pay the lumpsum and, in respect of other contracts awarded to him prior to exercise of such option, he shall pay tax under section 6 of the Act.

(4) The withdrawal of option to pay the lumpsum by the works contractor shall apply only to the works contracts awarded to him subsequent to such withdrawal, but in respect of other contracts he shall continue to pay the lumpsum till the completion of each of contract.

(5) The works contractor shall file a quarterly return in Form VAT-XV-F.