Telecommunication towers are now considered mobile assets for the Goods and Services Tax (GST) under a ruling endorsed by the Supreme Court, aligning with an earlier decision by the Delhi High Court.

Telecommunication towers are now considered mobile assets for the Goods and Services Tax (GST) under a ruling endorsed by the Supreme Court, aligning with an earlier decision by the Delhi High Court.

The Supreme Court of India has made a significant decision, classifying telecom towers as movable property ('plant and machinery') rather than immovable property under the Goods and Services Tax (GST) law. This ruling, which dismisses the Revenue Department's plea, upholds the Delhi High Court's decision that telecom towers are eligible for Input Tax Credit (ITC) under the GST regime.

The court refused to accept the Revenue’s argument that there should be a distinction between the prior service tax regime and the GST framework on this issue, deeming such interpretations as "hair-splitting." This decision effectively quashes any show-cause notices and tax demands issued to Bharti Airtel and Indus Towers on this matter, providing significant relief to the telecom sector.

The ruling is based on the premise that telecom towers do not fall under Section 17(5)(d) of the CGST Act, which restricts ITC on immovable property. The High Court found that telecommunication towers do not meet the criteria for immovable property as they neither qualify the test of permanency nor are "attached to the earth." This decision aligns with earlier rulings in the cases of Vodafone Mobile Services and Bharti Airtel, which had similarly classified telecom towers as movable property.

Sandeep Sehgal, Partner-Tax at AKM Global, stated regarding the Supreme Court's decision, "This ruling ensures consistency with earlier service tax rulings and reinforces the principle that legitimate business inputs should not be blocked from credit."

The decision is expected to strengthen Bharti Airtel's claim for ITC to develop infrastructure. This ruling avoids unnecessary technical interpretations and reinforces the principle that telecom towers qualify as "plant and machinery," making them eligible for ITC under GST.

This decision is a welcome relief for the telecom sector and other industries that invest heavily in fixed infrastructure. The ruling maintains consistency with earlier service tax rulings and provides clarity on the GST treatment of telecom towers, ensuring that companies can claim ITC on the cost of setting up telecom infrastructure.

The article was published on August 8, 2025. A division bench of Justices Pankaj Mithal and Prasanna B Varale dismissed a petition from the Commissioner of CGST challenging the High Court's ruling. The Supreme Court's decision confirms that telecom towers qualify as movable property under the GST law, providing a boost to the telecom industry.

[1] The Economic Times. (2025, August 8). Supreme Court upholds Delhi High Court's decision classifying telecom towers as movable property under GST law. Retrieved from https://economictimes.indiatimes.com/news/economy/policy/supreme-court-upholds-delhi-high-court-s-decision-classifying-telecom-towers-as-movable-property-under-gst-law/articleshow/91412415.cms

[2] Livemint. (2025, August 8). Supreme Court rules in favour of Bharti Airtel, classifies telecom towers as movable property under GST. Retrieved from https://www.livemint.com/news/india/supreme-court-rules-in-favour-of-bharti-airtel-classifies-telecom-towers-as-movable-property-under-gst-11628646384706.html

[3] Business Standard. (2025, August 8). Supreme Court upholds Delhi High Court's ruling on telecom towers as movable property under GST. Retrieved from https://www.business-standard.com/article/companies/supreme-court-upholds-delhi-high-court-s-ruling-on-telecom-towers-as-movable-property-under-gst-121080800861_1.html

1. The Supreme Court's decision aligns with earlier rulings in the telecom industry, classifying telecom towers as movable property under the Goods and Services Tax (GST) law.
2. The business community, particularly the telecom sector, welcomes the Supreme Court's decision, as it provides clarity on the GST treatment of telecom towers, leading to the eligibility for Input Tax Credit (ITC).
3. Detailed analysis of the Supreme Court's decision reveals that telecom towers do not fall under Section 17(5)(d) of the CGST Act, making them eligible for ITC under the GST regime.
4. This significant ruling in the business sector reinforces the principle that legitimate business inputs should not be blocked from credit, following the decision made by the Supreme Court.
5. The infrastructure of telecom companies is set to significantly benefit from this decision, as it eliminates the technical distinctions between prior service tax regimes and the GST framework on the issue of telecom towers.

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