In a major relief to the telecom industry, the Supreme Court on Friday (August 8) dismissed the Revenue Department’s Special Leave Petition (SLP) challenging a Delhi High Court ruling that had held mobile telecom towers to be ‘plant and machinery’, thereby allowing input tax credit (ITC) under the Goods and Services Tax (GST) regime.

The SLP, filed in the case of Bharti Airtel, was rejected at the admission stage by a bench comprising Justice Pankaj Mithal and Justice Prasanna B. Varale, effectively upholding the Delhi High Court’s decision and declining to interfere.

The top court also refused to accept the Revenue’s attempt to differentiate between the service tax regime and the GST framework in the treatment of such infrastructure, stating that it would not permit such “hair-splitting” interpretations.

ITC cannot be denied on telecom towers: SC

The crux of the dispute was whether telecom towers, often affixed to land or rooftops, qualify as immovable property, which is blocked from ITC under Section 17(5) of the CGST Act, 2017, or as plant and machinery, which is specifically excluded from the definition of blocked credit.

The Delhi High Court had earlier ruled in favour of Bharti Airtel and other petitioners, holding that telecom towers fall within the scope of plant and machinery and are eligible for ITC. The Revenue had denied this benefit, arguing that the towers were immovable in nature and thus ineligible for credit.

Source: CNBC TV-18