LANDMARK JUGDEMENT IN GST

Overview of the Case: The Petitioners received official notices under the Central Goods and Services Tax (CGST) Act, saying that telecommunication towers are considered "immovable property." Because of this, they wouldn't qualify for claiming Input Tax Credit (ITC) under GST.

Challenge by Petitioners: The Petitioners argued that telecommunication towers are movable because they can be taken apart and moved, so they should not be classified as "immovable property." They wanted to prove that they are eligible for ITC.

Court's Decision: The Delhi High Court agreed with the Petitioners, stating that telecommunication towers can be dismantled and moved, which means they are not permanent. Therefore, they are considered movable property, and the Petitioners can claim ITC.

Background Context: Before GST started, there was confusion about ITC for telecommunication towers. Previous court rulings said that these towers and related structures are classified as "goods" and not "immovable property." This means that costs related to these structures should qualify for ITC.

In recent cases, it has been established that if the towers can be moved without damage, they should be classified as movable.

Arguments from Both Sides:

• For the Petitioners: They said that telecommunication towers can be taken down and moved easily, so they should be eligible for ITC. They referenced earlier court decisions which supported this view, arguing that just because the law says they aren’t classified as "plant and machinery," that doesn’t mean they are immovable.
• For the Department: The authorities argued that telecommunication towers should be seen as immovable because they are built on concrete bases. They claimed that the law specifically excludes towers from being considered "plant and machinery," which means they should be treated as immovable. They also said that the rules under the CGST are different from previous rules which were favorable to the Petitioners.

Court's Conclusion: The Delhi High Court firmly stated that just because telecommunication towers are excluded from the term "plant and machinery," doesn't mean they are not movable. In fact, to be classified as immovable property, they would need to meet certain criteria that they do not.

Impact: The court's decision reinforces the idea that telecommunication towers are movable. If the government disagrees with this outcome, they might take the case to the Supreme Court, which could affect ITC claims for various modern infrastructures like telecommunication towers and pre-fabricated buildings.