Telecom Towers Are Movable Properties as They Do Not Meet the Test of Permanency and ITC on Same Cannot Be Denied | HC

Case Details: Bharti Airtel Ltd. v. Commissioner, CGST Appeals-1, Delhi - [2024] 169 taxmann.com 390 (Delhi)

Judiciary and Counsel Details

• Yashwant Varma & Girish Kathpalia, JJ.
• Sujit Ghosh, Sr. Adv., Kumar Visalaksh, Udit Jain, Ms Akansha Dikshit, V. Lakshmikumaran, Yogendra Aldak & Sumit Khadaria, Advs. for the Petitioner.
• Anurag Ojha, SSC, Subham Kumar, Dipak Raj, Kumar Abhishek, Ms Ira Singh, Aryan Dhaka, Anurag Sahay, Rohit Kumar, Advs., Mukul Singh, CGSC, Ms Avshreya Pratap Singh, SPC & Abhigyan Siddhant, GP for the Respondent.

Facts of the Case

In the present case, the writ petition was filed to challenge the proceedings under GST in which the department raised demand of tax along with interest and penalty on the ground that input tax credit was denied on inputs and input services used for setting up passive infrastructure i.e. telecommunication towers. It was contended that telecommunication towers would not fall within ambit of Section 17(5)(d) and hence, denial of input tax credit would not sustain.

High Court Held

The Honorable High Court noted that the Supreme Court in case of Bharti Airtel Ltd. v. Commissioner of Central Excise [2024] 168 taxmann.com 489 has conclusively held that telecommunication towers cannot be construed as immovable property. The Court further noted that telecommunication towers would not qualify as immovable property as they neither qualify test of permanency nor can be said to be attached to earth. The mobile towers can be dismantled and moved and they were never erected with an intent of conferring permanency. Their placement on concrete bases was only to enable those towers to overcome vagaries of nature. Thus, the denial of input tax credit on telecommunication towers would not sustain.

List of Cases Reviewed

• Commissioner of Central Excise v. Solid and Correct Engineering Works [2010] 5 SCC 122 (para 16)
• Vodafone Mobile Services Ltd. v. Commissioner of Service Tax 2018 SCC OnLine Del 12302 (para 19)
• Bharti Airtel Ltd. v. Commissioner of Central Excise [2024] 168 taxmann.com 489 (SC) (para 19) followed.

List of Cases Referred to

• Bharti Airtel Ltd v. CCE 2024 SCC OnLine SC 3374 (para 6)
• Vodafone Mobile Services Limited v. CST 2018 SCC OnLine Del 12302 (para 6)
• CCE v. Solid and Correct Engineering Works & Others (2010) 5 SCC 122 (para 15).