Tax Liability to Be Discharged in Each State Based on Work Done for Barrage Construction in Telangana and Maharashtra | HC

Case Details: L and T PES JV v. Assistant Commissioner of State Tax - [2025] 170 taxmann.com 181 (Telangana)

Judiciary and Counsel Details

• P. Sam Koshy & Laxmi Narayana Ali Shetty, JJ.
• Karthik Ramana Puttamreddy, Adv. for the Petitioner.

Facts of the Case

The petitioner JV received a contract from State of Telangana for construction of a barrage in Telangana. The execution of contract was spread between Telangana and Maharashtra. The petitioner raised separate bills for works executed in both States with corresponding GSTINs. However, the TDS deducted by department on total value of bills was remitted only to Telangana. Therefore, the petitioner approached the department for refund of excess TDS but the same was rejected. It filed writ petition and contended that the entire TDS amount was deposited with the State of Telangana and no reason to deny refund.

High Court Held

The Honorable High Court noted that the place of supply of service in both States can be assessed/determined only on the basis of actual works executed in each State and also as per terms of agreement as specified in Explanation to section 12(3) of IGST Act. Since, the place of supply is determined depending on proportion of work executed and it falls under category of intra-State supply under Section 8 of IGST Act with respect to proportion of works executed in respective States by contractors registered in respective States, the tax liability shall be discharged individually in each State to extent of proportion of works executed therein.

Therefore, it was held that petitioner should approach adjudicating authority with relevant material and on such submission, adjudicating authority should consider same and pass appropriate orders for refund of TDS amount in event of petitioner furnishing appropriate, cogent documents in proof of discharge of liability in State of Maharashtra.