Advance recovery of tax on sales and supplies to Governments and other persons
Section 40 of the Bihar Value Added Tax Act, 2005 deals with advance recovery of tax on sales and supplies to Governments and other persons. Subject to the provisions of section 6, any person responsible for paying sale price or any amount purporting to be the full or part payment of sale price in respect of sales or supplies of taxable goods exceeding rupees two lakh fifty thousands during a year made to the State Government or the Cent The Act came into force on 23 Jun 2005.
(1) Subject to the provisions of section 6, any person responsible for paying sale price or any amount purporting to be the full or part payment of sale price in respect of sales or supplies of taxable goods exceeding rupees two lakh fifty thousands during a year made to the State Government or the Central Government or a company, corporation, Board, authority, undertaking or any other body owned, financed or controlled either wholly or partly by the State Government or the Central Government, shall, at the time of payment, subject to such conditions and restrictions as may be prescribed, deduct an amount at the rate as may be specified by the State Government, by a notification, on account of tax on the amount of such payment:
Provided that the rate or rates to be specified by the State Government shall not be more than the rate of tax applicable to the goods sold or supplied.
(2) Notwithstanding any law or contract to the contrary, the person making such deduction shall be lawfully competent to make such deduction.
(3) The payment of the amount deducted under sub-section (1) into the Government Treasury in the prescribed manner, shall be the liability of the person making such deduction.
(4) The payment of the amount deducted under sub-section (1) into the Government Treasury by the person making the deduction shall be deemed to be a payment by or on behalf of the seller or supplier concerned.
(5) If any person contravenes any or all of the provisions of sub-sections (1), (3) and (4), he shall be liable to pay, by way of penalty, a sum not exceeding twice the amount of tax deductible under sub-section (1):
Provided that such penalty shall not be imposed unless the person contravening the provisions is given an opportunity of being heard by the prescribed authority.
(6) The provisions of sections 39 and 47 for recovery of any amount of tax due from a dealer shall, mutatis mutandis, apply for recovery of any amount of tax deducted or any penalty imposed but not deposited under this section.
Explanation.--For the purposes of this section, the person in this section shall include all officers or authorities who are competent or authorised to make payment of the sale-price in respect of sales to the State Government or the Central Government or to a company, corporation, Board, authority, undertaking or any other body owned, financed or controlled wholly or partly by the State Government or the Central Government.
(7) The provisions of sub-section (5) of section 41 shall, mutatis mutandis, apply, so far as it relates, to issuance of certificate to person from whose bills deduction has been made and for filing of quarterly statements by the person making the deductions.
Section 40, The Bihar Value Added Tax Act, 2005 (Act 27 of 2005).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… an amount of Rs. 5,88,627/- along with interest and penalty, as deducted by respondent authorities in the name of work contract tax @ 13.5% from the gross bill amount of the petitioner in lieu of supply made by the petitioner and the above mentioned deduction was made as work contract tax against Form C-II, under Section 40 of the Bihar Value Added Tax Act, 2005, but till date neither the respondent authorities deposited the tax amount tot eh Sales Tax Department nor issued Form C-II against the deduction made as per provisions of Section 40 of Bihar VAT Act, 2005 due to which Sale Tax Authorities …
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… Any person or dealer collecting any amount under sub-section(1) shall, within the prescribed time, deposit the amount so collected into Government Treasury in the manner prescribed for deposit of tax under the Act; (5) The provisions of sub-section (3), sub-Section (4), sub-Section (50 and sub-Section (6) of Section 40 of the Bihar Value Added Tax Act, 2005 ( Act 27 of 2005) relating to collection, deposit and liability of the person or dealer collecting such tax, discharge of liability, recovery and imposition of penalty shall, mutatis mutandis, apply to any amount collected under the provisions of sub-Section (1) …
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… Any person or dealer collecting any amount under sub-section(1) shall, within the prescribed time, deposit the amount so collected into Government Treasury in the manner prescribed for deposit of tax under the Act; (5) The provisions of sub-section (3), sub-Section (4), sub-Section (50 and sub-Section (6) of Section 40 of the Bihar Value Added Tax Act, 2005 ( Act 27 of 2005) relating to collection, deposit and liability of the person or dealer collecting such tax, discharge of liability, recovery and imposition of penalty shall, mutatis mutandis, apply to any amount collected under the provisions of sub-Section (1) …
Questions about Section 40
What does Section 40 of the Bihar Value Added Tax Act deal with?
Section 40 of the Bihar Value Added Tax Act is headed "Advance recovery of tax on sales and supplies to Governments and other persons". Subject to the provisions of section 6, any person responsible for paying sale price or any amount purporting to be the full or part payment of sale price in respect of sales or supplies of taxable goods exceeding rupees two lakh fifty thousands during a year made to the State Government or the Cent
How do I find court cases under Section 40 of the Bihar Value Added Tax Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Bihar Value Added Tax Act 40, section 40 Bihar Value Added Tax Act, section 40 of the Bihar Value Added Tax Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.
What should I read with Section 40 of the Bihar Value Added Tax Act, and has it changed?
Its own text turns on section 6 (Non-levy of tax in certain cases), section 39 (Payment and recovery of tax), section 41 (Advance recovery of tax from works contractors), section 47 (Special mode of recovery of tax and other liabilities under this Act), so none of them can safely be read on its own. 3 other provisions in this corpus refer back to it.
When did Section 40 of the Bihar Value Added Tax Act come into force?
Section 40 of the Bihar Value Added Tax Act, cited as Bihar Value Added Tax Act 40, came into force on 23 Jun 2005, having been enacted on 23 Jun 2005. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions2082 words
- 93. Power to make rules1896 words
- 56. Production of books of account, inspection, search and seizure1330 words
- 24. Returns, payment of tax, interest and penalty1244 words
- 16. Input tax credit1054 words
- 9. Tribunal1053 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 17 Oct 2026. This page is not a substitute for legal advice.