Case Law

SC Dismisses Review Plea, Confirms GST ITC on Telecom Towers — Airtel & Indus Towers Win

Published 20 Aug 2026· Updated 25 Aug 2026· 6 min read

Executive Summary

The Supreme Court has dismissed the Centre’s review petitions against its 8 August 2025 judgment upholding input tax credit (ITC) claims by Bharti Airtel and Indus Towers on goods and services used in setting up mobile telecom towers. A Bench of Justices Vikram Nath and Prasanna B. Varale, hearing review petitions filed by the Office of the Commissioner of CGST (Appeals-1), Delhi, and others, held on 19 August 2026 that there was “no error apparent on the face of the record” warranting reconsideration. The dismissal leaves undisturbed the Delhi High Court’s finding that telecom towers are movable “plant and machinery” — not immovable property — and therefore fall outside the ITC restriction under Section 17(5)(d) of the CGST Act. The underlying dispute involved a Directorate General of GST Intelligence (Ghaziabad) show cause notice under Section 74 of the CGST Act disallowing ITC on diesel generator sets, battery banks, air conditioners, and other passive infrastructure for FY 2017-18 to FY 2023-24, amounting to ₹5,454.6 crore, which the Delhi High Court had already quashed.

Background / Facts

The dispute originated in 2024, when the Directorate General of GST Intelligence, Ghaziabad, issued a show cause notice to Indus Towers under Section 74 of the CGST Act, 2017, disallowing ITC on diesel generator sets, battery banks, air conditioners, and other passive telecom infrastructure assets, covering FY 2017-18 through FY 2023-24 and amounting to ₹5,454.6 crore. The Revenue’s position was that telecom towers, being fixed to the ground through foundations and structural support, constituted “immovable property,” bringing them within the ITC restriction under Section 17(5)(d) of the CGST Act. Bharti Airtel and Indus Towers contended that telecom towers were essentially movable equipment — bolted, capable of being dismantled and relocated — with the concrete foundation providing only stability, not permanent annexation to the earth.

The Delhi High Court accepted the taxpayers’ position, holding that the test for immovability requires permanence and attachment to the earth, and that the exclusion of telecom towers from the definition of “plant and machinery” under the Explanation to Section 17(5) did not, by itself, make them immovable property. The High Court quashed the ₹5,454.6 crore demand. The Supreme Court, in its judgment dated 8 August 2025 (Commissioner, CGST Appeal-1, Delhi etc. v. M/s Bharti Airtel Limited etc., SLP (Civil) Diary No. 35416/2025, Bench of Justices Pankaj Mithal and Prasanna B. Varale), declined to disturb the Delhi High Court’s ruling, dismissing the Revenue’s special leave petitions at the admission stage.

The Office of the Commissioner of CGST (Appeals-1), Delhi, and others then filed review petitions against that August 2025 judgment. On 19 August 2026, a Bench of Justices Vikram Nath and Prasanna B. Varale dismissed those review petitions, condoning the delay in filing but finding no merit in the Centre’s challenge: “We have carefully considered the review petition(s) as well as the grounds set out therein… there was no error apparent on the face of the record.” The matter was considered by circulation.

Why It Matters

This is now a final, twice-affirmed position: telecom towers are movable “plant and machinery” for GST ITC purposes, not immovable property. For a capital-intensive sector where tower deployment and maintenance are a substantial part of expenditure, this closes a dispute that had exposed operators and infrastructure providers to multi-thousand-crore demands nationwide. The ruling is also consistent with the Supreme Court’s earlier position under the pre-GST (service tax/CENVAT) framework recognising credit eligibility on towers and shelters, closing the gap between legacy and GST-era treatment.

Key Takeaways

Telecom towers are movable “plant and machinery,” not immovable property, for the purposes of the Section 17(5)(d) CGST Act ITC restriction — this position is now final after two rounds of Supreme Court scrutiny (the original SLP dismissal and now the review dismissal).
The test for immovability turns on permanence and intention of annexation to the earth — bolted structures capable of being dismantled and relocated do not meet that test, even where a concrete foundation is involved.
Exclusion of an asset from the definition of “plant and machinery” under the Explanation to Section 17(5) does not, by itself, make that asset “immovable property” — these are two separate legal questions.
A Supreme Court review petition dismissed “at circulation” with a finding of “no error apparent on the face of the record” is a high bar — it signals the Court sees no basis to revisit its own earlier reasoned or unreasoned dismissal, even without a detailed fresh judgment.
For the Revenue, the practical next step is likely to be revisiting pending show cause notices and appeals premised on the “immovable property” characterisation of telecom towers and similar bolted, dismantlable infrastructure.

Practical Implications

Telecom operators and tower infrastructure companies with pending GST demands, show cause notices, or appeals premised on telecom towers (or comparable bolted, dismantlable infrastructure such as diesel generator sets, battery banks, and similar passive assets) being “immovable property” now have a final Supreme Court position to rely on. Advisors should review any open matter on this specific ground and consider whether a settlement, withdrawal application, or fresh submission citing this ruling is appropriate. More broadly, the “permanence and intention of annexation” test articulated by the Delhi High Court and left undisturbed by the Supreme Court is a useful reference point for any client dispute involving the immovable-versus-movable-property characterisation of installed equipment for ITC purposes — not just telecom towers specifically.

Action Checklist

Identify any client with a pending GST demand, SCN, or appeal premised on telecom towers or similar bolted/dismantlable infrastructure being “immovable property” under Section 17(5)(d).
Cite this Supreme Court development (both the original 8 August 2025 dismissal and the 19 August 2026 review dismissal) in any ongoing submission or appeal on this specific ground.
For clients in capital-intensive infrastructure sectors (telecom, data centres, industrial plant) with similar bolted/foundation-mounted equipment, review whether the same “permanence and intention of annexation” test could apply to resist an immovable-property ITC denial.
Where a client has already reversed ITC on similar assets under departmental pressure, assess whether a refund claim or re-availment is now viable in light of this final position.

Relevant Sections / Rules / Case Citation

Section 17(5)(d), CGST Act, 2017 (ITC restriction on goods/services used for construction of immovable property, other than plant and machinery)
Section 74, CGST Act, 2017 (show cause notice for fraud/wilful misstatement/suppression — the provision under which the original SCN was issued)
Commissioner, CGST Appeal-1, Delhi etc. v. M/s Bharti Airtel Limited etc. — Supreme Court, SLP (Civil) Diary No. 35416/2025, judgment dated 8 August 2025, Bench: Justices Pankaj Mithal and Prasanna B. Varale (2025 TAXSCAN (SC) 238)
Review petitions in the same matter, dismissed 19 August 2026, Bench: Justices Vikram Nath and Prasanna B. Varale (per Business Standard reporting; specific review petition diary/case number not independently located this session — recommend confirming before citing in a formal filing)
Underlying Delhi High Court ruling quashing the DGGI Ghaziabad show cause notice (case citation not independently re-confirmed this session)

FAQs

Q: Does this ruling mean all fixed telecom/industrial equipment is automatically eligible for GST ITC?
A: No — the ruling turns on a fact-specific test of permanence and intention of annexation to the earth. Equipment that is genuinely permanently affixed with no intention or capability of relocation could still be treated as immovable property. Telecom towers were found movable because they are bolted, dismantlable, and relocatable.

Q: Is this Supreme Court ruling final, or can the Revenue challenge it further?
A: A review petition is ordinarily the last resort after a Special Leave Petition dismissal; a curative petition remains a theoretical, narrowly-available further step but is rare and difficult to succeed on. For practical purposes, this position should be treated as settled.

Q: What was the value of the demand that was ultimately quashed?
A: The Directorate General of GST Intelligence, Ghaziabad’s show cause notice against Indus Towers, covering FY 2017-18 to FY 2023-24, amounted to ₹5,454.6 crore.

Internal Links

Act Explainer: Section 17(5)(d) CGST Act — The “Immovable Property” Test for Plant & Machinery — /act-explainer-section-17-5-d-cgst-immovable-property-plant-machinery/ (Article 2, this cycle)
GST Litigation & Input Tax Credit hub — /category/gst-updates/

Act Explainer: Section 17(5)(d) CGST Act — The “Immovable Property” Test for Plant & Machinery (Article 2, this cycle)

Author & Disclaimer

Prepared by Finoscape Editorial Team — contact@finoscape.com. This article is for general informational purposes and does not constitute legal or tax advice. The review petition’s specific diary/case number was not independently located this session; readers relying on this analysis for a specific matter should independently confirm the citation before use.