Telecommunication towers are considered movable property and qualify for input tax credit, as they do not meet the criteria for immovable property under Section 17(5) of the CGST Act.

ORDER :

S.R.KRISHNA KUMAR, J.

1. In this petition, petitioner seeks for the following reliefs:-

“ a) Issue a writ of Certiorari or any other appropriate Writ or order or direction under Article 226 of the Constitution of India quashing the Show cause Notice Reference No.DC(Aud)-4.7/GST/DRC-01/IND2024-25 in FORM-GST-DRC-01 dated: 24.05.2024 issued by Respondent No.1 at Annexure-A, for the period from April 2019 to March 20202 which proposed to demand and recover ITC of Rs.24,22,64,468/- [CGST of Rs.7,14,68,174/- + SGST of Rs.7,14,68,174/- + IGST of Rs.9,93,28,150/-] along with interest and penalty under Section 73 of the CGST Act/KGST Act.

b) for such further other reliefs as the nature and circumstances of the case may require.”

2. Heard learned counsel for the petitioner and learned HCGP for the respondent – revenue and perused the material on record.

3. The issue in controversy involved in the present petition as regards Input Tax Credit on inputs/capital goods / input services used for construction of telecommunication towers by the petitioner came up for consideration before the Division Bench of the Delhi High Court in the case of M/s.Bharti Airtel Limited, Indus Towers Limited, Elevar Digitel Infrastructure Pvt. Ltd., (Earlier known as Atc Telecom Infrastructure Pvt.Ltd.,) versus Commissioner, CGST Appeals – 1 Delhi, Union of India & Ors. – 2024(12) TMI 998- Delhi High Court, wherein it was held as under:-

“1. These three writ petitions assail the proceedings drawn by the respondents under the Central Goods and Services Tax Act, 20171 and essentially question the characterization of telecommunication towers as immovable property and thus falling within the ambit of Section 17(5) of the CGST Act and being illegible for input tax credit.

2. While Bharti Airtel assails the validity of an Order-in- Original dated 24 March 2023 as affirmed in appeal in terms of the order dated 31 May 2024 passed by the Commissioner of Central Tax Appeals-1, the writ petitions preferred by Indus Towers Limited W.P. (C) 14710/2024 and Elevar Digitel Infrastructure Pvt Ltd. W.P. (C) 16477/2024, impugn Show Cause Notices2 laying similar allegations.

3. For purposes of brevity, we propose to take note of the salient facts as they obtain in the writ petition preferred by Indus Towers. The impugned SCN under Section 74 of the CGST Act raises a demand of tax along with interest and penalty for the period 01 July 2017 to 31 March 2024 relating pan India to 48 Goods and Services Tax3 registrations of the writ petitioner. Indus Towers explains that it is engaged in the business of providing passive infrastructure services to telecommunication service providers.

4. As was noticed in the prefatory parts of this decision, the impugned SCNs' seek to deny input tax credit on inputs and input services used for setting up passive infrastructure on the ground that the same were used in the construction of telecommunication towers and consequently falling within the ambit of clause (d) of Section 17(5) of the CGST Act. The relevant part of Section 17 is extracted hereinbelow:-

"17. Apportionment of credit and blocked credits.

xxxx xxxx xxxx

(5) Notwithstanding anything contained in sub- section (1) of Section 16 and sub-section (1) of Section 18, input tax credit shall not be available in respect of the following, namely:—

(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:—

(A) further supply of such motor vehicles; or

(B) transportation of passengers; or

(C) imparting training on driving such motor vehicles;

(aa) vessels and aircraft except when they are used—

(i) for making the following taxable supplies, namely:—

(A )further supply of such vessels or aircra