The Supreme Court on Friday upheld the Delhi High Court’s decision to categorise telecom tower as movable property under the GST law. This is likely to strengthen Bharti Airtel’s claim for input tax credit (ITC) to develop infrastructure.
A division bench of Justices Pankaj Mithal and Prasanna B Varale dismissed a petition from the Commissioner of CGST, who had challenged the High Court’s ruling that telecom towers do not meet the criteria for immovable property, “We are not satisfied that these are fit cases to exercise our discretion under Article 136 of the Constitution of India,” the bench stated.
In its ruling last year, the High Court quoted an earlier ruling of the Supreme Court and said that telecommunication towers would clearly not qualify the five fundamental precepts which define an immovable property. It was found that they neither qualify the test of permanency nor can they be said to be “attached to the earth”. Mobile towers, it was held, could be dismantled and moved and that they were never erected with an intent of conferring permanency.
“Their placement on concrete bases was only to enable those towers to overcome the vagaries of nature. Therefore, there cannot possibly be a doubt with respect to telecommunication towers being movable property,” the Court held.
The High Court also referenced earlier rulings in the cases of Vodafone Mobile Services and Bharti Airtel, which had similarly classified telecom towers as movable property. Based on this, the court ruled that telecommunication towers do not fall under Section 17(5)(d) of the CGST Act, which restricts ITC on immovable property.
According to Sandeep Sehgal, Partner-Tax at AKM Global, the Supreme Court’s decision confirms that telecom towers qualify as “plant and machinery”, making them eligible for ITC under GST.
“By refusing to admit the Revenue’s appeal, the Supreme Court has confirmed that companies like Bharti Airtel can rightfully claim GST credit on the cost of setting up telecom infrastructure. The judgment ensures consistency with earlier service tax rulings and avoids unnecessary technical interpretations. This is a welcome relief for the telecom sector and other industries that invest heavily in fixed infrastructure, reinforcing the principle that legitimate business inputs should not be blocked from credit,” he said.
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