Supreme Court affirms mobile towers are not immovable property; upholds ITC eligibility under GST

In a major relief to the telecom industry, the Supreme Court on Friday (August 8) dismissed the Revenue Department’s Special Leave Petition (SLP) challenging a Delhi High Court ruling that had held mobile telecom towers to be ‘plant and machinery’, thereby allowing input tax credit (ITC) under the Goods and Services Tax (GST) regime.

The SLP, filed in the case of Bharti Airtel, was rejected at the admission stage by a bench comprising Justice Pankaj Mithal and Justice Prasanna B. Varale, effectively upholding the Delhi High Court’s decision and declining to interfere.

The top court also refused to accept the Revenue’s attempt to differentiate between the service tax regime and the GST framework in the treatment of such infrastructure, stating that it would not permit such "hair-splitting" interpretations.

ITC cannot be denied on telecom towers: SC

The crux of the dispute was whether telecom towers, often affixed to land or rooftops, qualify as immovable property, which is blocked from ITC under Section 17(5) of the CGST Act, 2017, or as plant and machinery, which is specifically excluded from the definition of blocked credit.

The Delhi High Court had earlier ruled in favour of Bharti Airtel and other petitioners, holding that telecom towers fall within the scope of plant and machinery and are eligible for ITC. The Revenue had denied this benefit, arguing that the towers were immovable in nature and thus ineligible for credit.

Appearing for the assessee -- Bharti Airtel and other petitioners were Senior Advocates Arvind P. Datar and Balbir Singh, along with Advocates V. Lakshmikumaran, Kumar Visalaksh, and Udit Jain of Economic Laws Practice.

Datar argued that the legislative intent, both in the pre-GST and post-GST regime, has been consistent in denying ITC only in respect of immovable property — a category that telecom towers do not fall under. He also pointed out that the issue had already been settled by the Supreme Court in the context of service tax in Bharti Airtel’s own case.

On the other side, Revenue was represented by Senior Advocate Rupesh Kumar and the bench agreed, signalling a strong pushback against the Revenue’s restrictive interpretation of credit eligibility under GST.

Industry hails SC decision

Tax experts and industry stakeholders have welcomed the verdict, noting that it brings long-needed clarity and removes ambiguity around the treatment of telecom infrastructure.

Sandeep Sehgal, Partner – Tax at AKM Global, says that “The Supreme Court has upheld the Delhi High Court’s ruling that telecom towers qualify as ‘plant and machinery’ and are therefore eligible for input tax credit (ITC) under GST. This puts an end to the long-standing dispute where the tax department was treating these towers as immovable property to deny credit.”

He added that the judgment aligns GST law with previous rulings under the service tax regime and ensures that legitimate business inputs are not disallowed from credit. “It’s a welcome relief not just for telecom but for other capital-intensive sectors investing in fixed infrastructure,” Sehgal said.