VAT deduction at source on works contracts requires withholding by contractees and timely remittance to treasury. Section 36A of the Delhi Value Added Tax Act, 2004 requires persons making payments or credits to contractors under works contracts to deduct VAT at source at the prescribed rates based on contractor registration status and deposit the deducted amount to the Delhi Government Treasury within the statutory period following the month of deduction; failure to deduct or deposit attracts interest and penalties under the Act.