Relief for telcos as Supreme Court grants tax credit on tower parts

In a relief for telecom operators – Bharti Airtel, Vodafone Idea, Tata Teleservices, and Indus Towers — the Supreme Court on Wednesday held that the companies can claim central value-added tax (Cenvat) credit on central excise duties paid by them on towers and their parts, green shelters, printers, office chairs, and other related materials.

The Supreme Court revoked an earlier judgement by Bombay High Court, which in 2014 ruled that the towers were not capital goods under the Cenvat Credit Rules 2004, and therefore denied telecom companies to claim any credit.