Tamil Nadu GST Authority Declines Ruling on Out-of-State Projects
The Tamil Nadu Authority for Advance Ruling refused to decide on GST exemptions for services performed in Maharashtra.
- Ruling
- Advance Ruling No. 16 /ARA/2023 Dated: 16.06.2023
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Harshita Infra Engineering asked if their subcontracted work was GST exempt.
- The work was performed for a project in Maharashtra.
- The Authority ruled it lacked jurisdiction because the work occurred outside Tamil Nadu.
- The Authority also refused to answer future-looking, hypothetical questions.
In short
The company asked the Tamil Nadu Authority for Advance Ruling (AAR) if their solid waste management subcontract was exempt from Goods and Services Tax (GST). Because the work was performed in Maharashtra, the Authority decided it did not have the power to rule on the matter.
What has changed
How it worked before
Businesses often assumed they could seek clarity from their home-state tax authority regardless of where the project site was located.
What has changed
The Authority clarified that it only has power over transactions occurring within its own state. If your project site is in a different state, the Tamil Nadu AAR will not hear your case, and they will not answer questions about future, hypothetical contracts.
Who this affects
Construction and engineering firms based in one state that perform subcontracted work in another state.
An example
A Chennai-based road construction firm wins a subcontract for a project in Karnataka. They ask the Tamil Nadu AAR if their services are exempt from GST. Based on this ruling, the Tamil Nadu AAR will reject the application because the project site is in Karnataka, not Tamil Nadu.
What you should do
If you have a tax doubt about a project in another state, do not apply to your home-state AAR. This ruling is not a law; it is a refusal to act, meaning you must seek guidance from the tax authority in the state where the work is actually performed.
If you do nothing
If you assume a ruling from your home state applies to out-of-state work, you risk incorrect tax filings. A tax officer in the state where the work is performed may disagree with your interpretation, leading to penalties and interest charges for unpaid taxes.
The terms explained
- Authority for Advance Ruling (AAR)
- A government body where businesses can ask for a formal decision on how tax laws apply to their specific transactions.
- Jurisdiction
- The legal power or authority of a government body to make decisions over a specific geographic area or subject.
- Place of supply
- The location where a service is considered to be provided for tax purposes, which determines which state's tax laws apply.
The ruling in detail
Authority for Advance Ruling
Harshitha Infra Engineering Private Ltd.
Advance Ruling No. 16 /ARA/2023 Dated: 16.06.2023 · Tamil Nadu
Questions before the authority
- Whether rendering sub contract work of Solid Waste Management/Land reclamation to Municipal Corporation of Greater Mumbai through the main contractor is exempted from payment of GST in terms of serial number 3 of Notification No.12/2017 dt.28.06.2017.
- If answer to the above is yes, whether that exemption is applicable to all sub contracts which the applicant will undergo in future.
Facts
The applicant is a private limited company engaged in land reclamation and solid waste management. They entered into a sub-contract with M/s Biomining India Private Ltd. to perform work for the Municipal Corporation of Greater Mumbai. The applicant sought an advance ruling on whether their sub-contracted services qualify for GST exemption under Notification No. 12/2017.
Ruling
| Question | What the authority ruled |
|---|---|
| Exemption for sub-contract work | Not admitted The Authority lacked jurisdiction as the place of supply is outside Tamil Nadu. |
| Applicability to future sub-contracts | Not admitted The question was deemed hypothetical. |
The Authority for Advance Ruling declined to answer both questions. It held that it lacked jurisdiction because the place of supply is outside the state of Tamil Nadu, and it further ruled that the second question was hypothetical in nature.
Reasoning
The Authority observed that the applicant is registered in Tamil Nadu, but the services are rendered in Maharashtra to a contractor registered in Maharashtra. Under the GST Act, the Authority for Advance Ruling is created under the SGST/CGST Act and its rulings are applicable within the particular state only. Since the situs of the transaction is not within Tamil Nadu, the Authority cannot acquire jurisdiction over the questions raised. Furthermore, the Authority noted that advance rulings cannot be rendered for cases that are hypothetical in nature.
Provisions relied on
- Section 96 of the Central Goods and Service Tax Act 2017
- Notification No. 12/2017 dt. 28.06.2017
For the practitioner
This ruling serves as a reminder that an AAR in one state **cannot provide a ruling** on transactions where the place of supply is located in another state. Practitioners should note that the Authority will **refuse to entertain applications** where it lacks territorial jurisdiction or where the questions are framed in a hypothetical manner.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/16_aar_2023_harshitha.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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