In a landmark decision, the Supreme Court has ruled in favor of telecom giants like Bharti Airtel and Reliance Jio, allowing them to claim central value-added tax (Cenvat) credits on duties paid for critical infrastructure items, including tower components, green shelters, and related materials. This judgment overturns a prior ruling by the Bombay High Court, which had excluded these items from being classified as capital goods, denying operators tax credits.
The decision is expected to significantly alleviate the financial pressures on the telecom sector, which has been grappling with regulatory and competitive challenges.
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Welcoming the decision, Lt Gen Dr SP Kochhar, Director General of the Cellular Operators Association of India (COAI), stated: “We welcome the Hon’ble Supreme Court’s judgment affirming the telecom industry’s entitlement to claim credit for taxes and duties paid on towers and their parts – including green shelters. This verdict will not only assist the industry in meeting compliance requirements but also help reduce the financial burden on the sector. By upholding the Delhi High Court’s interpretation, the Supreme Court reinforces fairness and consistency in taxation. We await the detailed judgment for further clarity on its implementation.”
The Apex Court’s ruling provides relief to operators who had argued that these items were essential for their operations and deserved classification as capital goods under tax regulations. The telecom sector, a backbone of India’s digital economy, stands to benefit greatly from this judgment, which could result in substantial financial savings and operational flexibility for service providers.
