If an Item Tax Template is selected in the Item Master, and a Tax Category is directly selected in the Supplier or Customer master or in the transaction document, it may cause an issue where the tax template is not applied to the item. To resolve this, I remove the In-State or Out-State Tax Category from the current document and it is working fine.
In below Image you can see Template is visible to select when Tax Category is not selected
In this below image you can see Tax template is not visible if I select Tax Category
