Supreme Court Dismisses GST Review Against Bharti Airtel And Others Over ITC On Telecom Towers

The Supreme Court on 19 August dismissed the Goods and Services Tax (GST) Department's review petition against Bharti Airtel Ltd, Indus Towers Ltd and Elevar Digitel Infrastructure Pvt Ltd, upholding the earlier dismissal of the Department's challenge to the Delhi High Court ruling on input tax credit (ITC) for telecom towers.

A Bench of Justices Vikram Nath and Prasanna B. Varale found no error apparent on the face of the record warranting reconsideration of the Supreme Court's earlier order dated 8 August 2025, by which it had dismissed the Department's special leave petition against the Delhi High Court's judgment dated 12 December 2024. The judges held:

"We have carefully considered the review petition(s) as well as the grounds set out therein. Having examined the impugned order in light of the grounds raised, we are of the considered opinion that there is no error apparent on the face of the record, in the order impugned, that would justify its reconsideration."

The dispute arose from three proceedings concerning the denial of ITC on inputs and input services used for telecom infrastructure and towers. The Revenue treated the towers as immovable property and invoked Section 17(5)(d) of the Central Goods and Services Tax Act, 2017, which restricts ITC relating to goods or services used for the construction of immovable property.

Bharti Airtel had challenged an Order-in-Original dated 24 March 2023, which the Commissioner of Central Tax affirmed on 31 May 2024. Indus Towers and Elevar Digitel had challenged similar show cause notices.

The companies argued that telecom towers constitute movable equipment as they can be dismantled and shifted from one location to another, while the concrete foundation merely provides stability. They relied on the Supreme Court's decision in Bharti Airtel Ltd. v. Commissioner of Central Excise, Pune.

The Delhi High Court had noted that Section 17(5) restricts ITC relating to the construction of immovable property, while its Explanation excludes telecommunication towers from the expression "plant and machinery". However, it held that this exclusion does not by itself make telecom towers immovable property, stating:

"The specific exclusion of telecommunication towers from the scope of the phrase 'plant and machinery' would not lead one to conclude that the statute contemplates or envisages telecommunication towers to be immovable property."

Further, the High Court had held that a telecom tower must independently qualify as immovable property for Section 17(5)(d) to apply. It subsequently quashed Bharti Airtel's orders dated 24 March 2023 and 31 May 2024, along with the show cause notices issued to the other companies, holding that telecom towers are movable property and that the denial of ITC could not be sustained.

The GST Department challenged the High Court's ruling before the Supreme Court under Article 136 of the Constitution, which empowers the Court to grant special leave to appeal against judgments or orders of courts and tribunals. The Supreme Court dismissed the challenge on 8 August 2025.

The Department thereafter sought a review of the Supreme Court's order. The Bench dismissed the review petition, finding no error apparent on the face of the record warranting reconsideration.