Supreme Court upholds GST ITC Availability on Mobile Telecom Towers, dismisses Revenue SLP [Read Order]

The High Court had found that telecom towers are movable assets and fall within “plant and machinery.” As a result, the restriction on credits relating to “immovable property” in Section 17(5)(d) of the CGST Act does not apply. The court noted that towers are typically bolted, can be dismantled and reinstalled, and therefore do not demonstrate an intention of permanent annexation to the earth.

By refusing to entertain the SLPs, the Supreme Court has brought welcome clarity for carriers such as Bharti Airtel and infrastructure firms like Indus Towers, which faced substantial tax demands hinging on the characterization of towers. Reports indicate the Delhi High Court had quashed demands aggregating several thousand crores on this issue, in focus on the financial significance of the dispute.

Friday’s order was brief, condoning delay and dismissing the petitions at the admission stage under Article 136 yet its impact is immediate: the interpretation of the High Court now governs the parties and will likely be persuasive for similar controversies nationwide. While the top court did not deliver a detailed, reasoned judgment, its decision to let the High Court’s view prevail signals judicial acceptance of the “movable plant and machinery” approach for telecom towers under GST.

The ruling is also in line with the Supreme Court’s earlier position under the pre-GST (service tax/CENVAT) framework, where it recognized eligibility of credit on towers and shelters—closing the gap between legacy and GST-era treatment and rebuffing attempts to draw sharp distinctions between the two regimes for this asset class.

For the Revenue, the pathway ahead may involve revisiting show-cause notices and pending appeals premised on the “immovable property” narrative. For taxpayers, compliance focus will shift to documentation and practicalities of availing credits consistent with the High Court’s fact-based test of movability and intent of annexation.

The Bench of Supreme Court Justices Pankaj Mithal and Prasanna B. Varale dismissed the Revenue’s special leave petitions (SLP), while upholding the Supreme Court.

With 5G densification and rural coverage expansion underway, the clarification on tower credits is expected to ripple through procurement models, lease-versus-buy decisions, and tower-sharing arrangements ultimately lowering total cost of ownership for operators.