A Long-Awaited Win for the Telecom Sector

In a groundbreaking decision, the Supreme Court has upheld the Delhi High Court’s ruling that telecom towers are movable property, making them eligible for input tax credit (ITC). The verdict brings significant financial relief to infrastructure providers and telecom operators, paving the way for accelerated digital infrastructure expansion across India.

The judgment comes at a crucial juncture when India is advancing rapidly toward nationwide 5G rollout, deeper rural connectivity, and the early stages of 6G research.

DIPA’s Persistent Advocacy Pays Off

The Digital Infrastructure Providers Association (DIPA), which has long argued that telecom towers should be recognized as plant and machinery rather than immovable property, hailed the verdict as a “transformative victory” for the digital ecosystem.

Manoj Kumar Singh, Director General of DIPA, stated that the ruling “substantially improves the financial health of infrastructure providers” and opens new possibilities for investment in underserved regions. The decision also ensures that legitimate business inputs are not unfairly blocked from credit eligibility, maintaining consistency with earlier service tax rulings and avoiding technical tax disputes.

Financial and Operational Impact

Previously, restrictive interpretations had locked up substantial working capital for telecom companies and tower providers. The Supreme Court’s progressive stance now frees up those funds, allowing for:

·       Reinvestment in infrastructure projects

·       Faster expansion in rural and remote areas

·       Lower service delivery costs across the telecom sector

This boost is expected to particularly benefit major players such as Bharti Airtel and Indus Towers, enabling them to claim substantial tax credits.

Catalyst for Digital India and 5G Expansion

The judgment aligns closely with the government’s Digital India vision and its high-speed connectivity goals. It provides the essential financial framework for faster rollout of 5G, bridging the digital divide, and strengthening India’s position as a future-ready digital economy.

India already has over 8.3 lakh telecom towers nationwide, forming the backbone of its connectivity infrastructure. With renewed financial strength, the industry is now better equipped to meet rising demand, integrate advanced technologies, and support nationwide digital transformation initiatives.

A Forward-Looking Judicial Move

By refusing to indulge in “hair-splitting” distinctions between tax regimes, the Supreme Court has demonstrated judicial foresight, ensuring a stable and business-friendly environment for critical infrastructure sectors.

DIPA applauded the verdict as not just a legal win but a strategic milestone for India’s telecom sector. As Singh noted, the decision “marks a new chapter of growth and opportunity,” giving the industry the momentum it needs to keep India on track toward becoming a global leader in digital infrastructure and connectivity.

(With agency inputs)