We are a civil contactor in Tamilnadu state and registered under TNVAT Act. We are taking one contract work from one Government Company in Chennai and the work site is situated at Pondicherry state. The major construction materials are purchased within Tamilnadu and send to the Pondicherry site for work execution. We are reporting this works contract turnover in the Tamilnadu VAT Return. All our payments are released by our client company from their Tamilnadu office only. We have applied and produced the TDS direction certificate issued by the Tamilnadu VAT Officer but our client company refused to accept this certificate and argued that since the work site falls in Pondicherry state, they propose to deduct the full tax amount and paid into Pondicherry state Vat account. By rejecting the TDS certificate issued by the Tamilnadu VAT Officer by our client company is correct or not? Kindly clarify me.
2 Answers from Attorneys
When you are executing your work order for the work being done in another state then you are required to register your company in that particular state(Pondicherry).So,your client company is correct in this case.
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