CONTENTS - Central Public Works Department

SECTION 30
(4) Completion certificate from the Senior Architect/Consultant Architect is necessary before final bill
is paid to the contractor.
(5) In the case of such work, the Executive Engineer should inform the Senior Architect/Consultant
Architect concerned of the work having been completed in all respects within one month of the
physical completion of the work, and request him to carry out his inspection and record the required
completion certificate. The Senior Architect/Consultant Architect shall inspect the work and issue
the certificate within 3 months of receipt of such an intimation.
(6) An attested copy of this certificate of the Senior Architect shall be attached with the office copy of
the final bill along with that of the Superintending Engineer, and it shall remain in the record of the
Division.
30.5 Payment through bank
Payment due to a contractor, if so desired by him, may be made to his bank instead of direct to him,
provided the contractor furnishes to the Engineer-in-charge all necessary documentation.
30.6 Deduction of income tax at source
(1) Under Section 194C of the Income Tax Act, 1961, deduction of income tax is required to be made
at source by disbursing officers from payments made to contractors.
(2) Before signing the First and Final bill/Running Account bill/Final bill, the Sub-Divisional Officer/
Divisional Officer should see that:
(i) The statutory deduction on account of income tax, wherever due, has been made from the bill
of the contractor, and
(ii) The same is specifically shown in the Memorandum of Payments thereof under the item, “By
recovery of amounts creditable to other works or heads of accounts”. (Note 5 below para
12.2.16 of CPWA Code).
(3) It is open to the contractor or the sub-contractor as the case may be, to make an application to the
Income Tax Officer concerned and obtain from him a certificate authorizing the payer to deduct
tax at such lower rate or deduct no tax as may be appropriate to his case. Such certificate will be
valid for the period specified therein unless it is cancelled by the Income Tax Officer earlier, and in
such cases deduction will be made accordingly.
(4) In view of the existing provision of Section 288 B of the Income Tax Act, 1961, the amount of tax
to be deducted at source should be rounded off to the nearest rupee by ignoring amount less than
fifty paise and rounding off amounts of fifty paise or more to one rupee.
(5) The tax deducted on behalf of the Government should be paid to the credit of the Central Government
on the same day by book adjustment. In other cases, the tax deducted should be paid to the credit
of the Central Government within one week from the last day of the month in which the deduction
is made.
(6) Challans, for paying tax into the Government account, can be obtained from the Income Tax
Officer concerned or the bank.
(7) The authority responsible for making any payment to a contractor or a sub-contractor, as the case
may be, should issue a certificate of tax deducted at source in the specified form.
30.7 Deduction of VAT and cess (Building and other Workers’ Cess Act 1996)
Cess Act is a central legislation but it is to be implemented by state Government by formation of cess
collection mechanism and constitution of welfare Board. It has not been put to implementation by some
state Government yet. There are provisions of deduction of cess from contractors bills and depositing
them with state welfare Board. VAT is a state subject. The rate and other provisions vary from state to
state. Under VAT also there is a statutory provision for deduction of tax at source ie. from contractor’s bill.
These provisions should be followed wherever applicable.
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