AP High Court on works contract and sub-contracts
The High Court of Andhra Predesh, in L&T vs State of Andhra Predesh, has held that where a contractor sub-contracts a part of the contract to a sub-contractor, there is only one taxable event.
The commercial tax authorities contended that there is no provision to deduct the turnover of the sub-contractor, on which value added tax has been paid by the sub-contractor, from the turnover of the main contractor. They also refused to give credit for the tax paid by the sub-contractor in computing the tax payable by the main contractor.