Introduction
Indian courts have spent a very long time arguing about whether a telecom tower is a building or a piece of equipment. The question sounds almost philosophical, but it has very real fiscal consequences. Three proceedings have now settled the answer, at least for the moment: the Supreme Court’s ruling in Bharti Airtel, 2024 on the CENVAT/Central Excise side; the Delhi High Court’s GST/ITC ruling in the Bharti Airtel/Indus Towers batch; and the Supreme Court’s dismissal of the Revenue’s SLP against that Delhi HC ruling in August 2025. Taken together, these cases confirm that telecom towers are movable goods. But the legal ground on which that conclusion rests is thinner than it looks, and there are good reasons to think the legislature may not leave it undisturbed.
I. The Classification Problem: Property Law Meets Tax Policy
The statutory baseline has not changed much since the 19th century. Both the General Clauses Act, 1897 and the Transfer of Property Act, 1882 define immovable property as things attached to the earth or permanently fastened to anything attached to the earth. These definitions predate not just telecom towers but the internal combustion engine. The legislature’s exclusion of standing trees and crops from the definition suggests it had natural growth in mind, not industrial infrastructure. And yet these are the tools Indian tax law reaches for when it needs to classify a 40-metre steel lattice structure bolted into a concrete foundation.
The classification question is, at its core, interpretive. Does bolting a structure into the ground for stability make it immovable? Or does the commercial reality of the asset, its modularity, its transferability, its continued existence as a product separate from the land, override the physical fact of its attachment? Courts have answered this question differently depending on when they were asked, and the inconsistency is worth examining carefully.
II. The Annexation Tests: A Critical Review
The classical test for immovability has two limbs: degree of annexation and object of annexation. In Bharti Airtel, 2024, the Supreme Court retained these but expanded the framework to six factors, adding the intendment of the parties, the functionality of the asset, permanency, and marketability. The expansion was presented as a synthesis of the existing case law. What it actually did was create more room for interpretive manoeuvre, which is precisely why the outcomes across cases have been so difficult to predict.
Earlier decisions were less flexible. In Quality Steel Tubes, the tube mill and welding head at issue had been so thoroughly integrated into the manufacturing setup that they failed both the goods test and the marketability test simultaneously. The Court did not need to pick one over the other; the machinery had essentially become part of the premises. Mittal Engineering Works and TTG Industries followed the same logic for custom-built heavy plant. These decisions all shared a common intuition: if removing the asset destroys its commercial identity, it is immovable.
Bharti Airtel, 2024 introduced a different intuition. The Court found that the concrete base of a telecom tower serves merely as a holder for stability, not as a permanent union with the earth. Since the tower could be unbolted, dismantled, and relocated, the attachment was incidental rather than constitutive. This is a defensible reading, but it sits in some tension with the earlier line of cases. The assets in Mittal Engineering Works and TTG Industries were also technically removable with enough effort; what distinguished them was that removal would make the asset purposeless, not simply inconvenient. The Court in Bharti Airtel, 2024 does not fully explain why this distinction should not have applied to towers.
The Delhi High Court had reached a similar conclusion years earlier in Vodafone Mobile Services, using the same functionality-based analysis. The Bombay High Court, in an earlier Bharti Airtel batch, had reached the opposite conclusion using the same basic tests. The Supreme Court’s 2024 ruling resolved this conflict, but it did so by privileging one application of the annexation doctrine over another, not by articulating a new principle that reconciles the two. The resulting precedent is authoritative, but not airtight.
III. The GST Dimension: Section 17(5)(d) and Its Limits
Before getting into the GST analysis, it is worth being precise about what Bharti Airtel, 2024 actually decided. It was a CENVAT/Central Excise case, governing the pre-GST period. The GST question, specifically whether telecom companies can claim input tax credit on towers under Section 17(5)(d) of the CGST Act, was separately adjudicated by the Delhi High Court in the Bharti Airtel/Indus Towers batch. The two proceedings ran on parallel tracks and should not be conflated.
The GST version of the dispute comes with an added statutory complication. Section 17(5)(d) blocks ITC for goods used to construct immovable property. The proviso carves out plant and machinery from this block. But the definition of plant and machinery in the CGST Act explicitly excludes telecommunication towers. Revenue’s argument followed from this: Parliament excluded towers from the plant and machinery carve-out, which means the credit block applies to them. By necessary implication, towers must be immovable property for GST purposes.
The Delhi High Court rejected this reading entirely. Its reasoning was threshold-based: Section 17(5)(d) applies only to immovable property. If towers are movable goods under general property law, the section does not engage in the first place, and the question of whether they qualify as plant and machinery never arises. The statutory exclusion of towers from the plant and machinery definition becomes a dead letter, not a basis for deeming them immovable.
This is a narrow but powerful holding. It says, in effect, that Parliament’s deliberate exclusion of towers from the plant and machinery definition has no operative legal consequence, because the more fundamental property-law classification removes towers from the ambit of Section 17(5)(d) altogether. Whether that is what Parliament had in mind when it drafted the exclusion is a question the Court did not need to resolve.
IV. After the SLP Dismissal: What the Clarity Is, and What It Is Not
Revenue challenged the Delhi HC ruling by way of SLP before the Supreme Court. The petition was filed 105 days late; the delay was condoned; and the SLP was then dismissed at the admission stage itself under Article 136 of the Constitution. Justice Pankaj Mithal and Justice Prasanna B. Varale declined to interfere, rejecting the argument that the GST and service tax regimes should be treated differently for this purpose. That is the current state of play as of August 2025.
What the industry has, then, is clarity for now. Whether it lasts is a separate question. The movability conclusion rests on general property law as interpreted by courts; it does not rest on anything within the CGST Act itself. A targeted legislative amendment, one that deems towers immovable specifically for GST purposes, would override the entire Bharti Airtel line without disturbing the property law analysis at all. This is not a speculative risk. The GST Council has used deeming fictions to override inconvenient judicial positions before, and the revenue stakes involved in allowing ITC on high-value telecom infrastructure give it a genuine incentive to do so again.
There is also a broader doctrinal concern that the current judgments do not address. The hypothetical mobility standard emerging from Bharti Airtel, 2024 has no obvious limiting principle. If a tower is movable because it can be unbolted and relocated, the same logic applies to pre-fabricated warehouses, modular data centers, and solar power installations. The Court does not explain why modularity and dismantlability should be determinative, as opposed to permanence of use or the extent to which the asset is integrated into surrounding infrastructure. Without that explanation, the precedent is vulnerable to being distinguished, or to being applied in ways that generate results nobody anticipated.
One legislative development that strengthens the taxpayer’s position, at least as a matter of statutory policy, is Section 14(3) of the Telecommunications Act, 2023 (effective June 26, 2024). It provides that towers installed on any property shall not be considered part of that property for property tax purposes, with Section 52(2) giving the provision overriding effect over other laws. This is consistent with the judicial position, but it operates in a different domain. Revenue could credibly argue that Section 14(3) governs property tax levies specifically and has no bearing on the ITC framework under the CGST Act. So this provision, while useful to the taxpayer’s narrative, does not close the debate.
Conclusion
The Bharti Airtel line of cases is a significant win for the telecom industry, and the August 2025 SLP dismissal means there is no immediate legal threat to the ITC position. But this victory rests on property law analysis that courts have applied inconsistently over the years, applied to a statutory structure that Parliament can amend without touching the property law question at all. The gap between movable for property law purposes and movable for GST purposes has not been legislatively addressed.
Courts got this right. Whether the legislature agrees is a different question, and the revenue incentive to disagree is substantial. The sensible posture, for industry and practitioners alike, is to treat the current clarity as a window rather than a settlement.
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Author: Arnav Roy & Yatharth Kamboj, Year IV Students at NLU Delhi
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