Input tax credit admissible on telecommunication towers under CGST Act: Delhi HC

Bharti Airtel Limited Vs Commissioner (Delhi High Court)

Delhi High Court held that telecommunication towers would not fall within the ambit of Section 17(5)(d) of the Central Goods and Services Tax Act. Thus, denial of input tax credit unsustainable in law.

Facts- These three writ petitions assail the proceedings drawn by the respondents under the Central Goods and Services Tax Act, 2017 and essentially question the characterization of telecommunication towers as immovable property and thus falling within the ambit of Section 17(5) of the CGST Act and being illegible for input tax credit.

While Bharti Airtel assails the validity of an Order-in-Original dated 24 March 2023 as affirmed in appeal in terms of the order dated 31 May 2024 passed by the Commissioner of Central Tax Appeals-1, the writ petitions preferred by Indus Towers Limited and Elevar Digitel Infrastructure Pvt Ltd, impugn Show Cause Notices laying similar allegations.

Conclusion- The specific exclusion of telecommunication towers from the scope of the phrase “plant and machinery” would not lead one to conclude that the statute contemplates or envisages telecommunication towers to be immovable property. Telecommunication towers would in any event have to qualify as immovable property as a pre-condition to fall within the ambit of clause (d) of Section 17(5). Their exclusion from the expression “plant and machinery” would not result in it being concomitantly held that they constitute articles which are immoveable.