2018 (9) TMI 1646 – AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND – 2018 (17) G. S. T. L. 649 (A. A. R. – GST) – Input Tax Credit (ITC) – goods and services used for erection of infrastructure to which fibre cables are connected – fibre cables leased to Telecommunication Operators – whether Cenvat credit of goods and services used for erection of infrastructure to which fibre cables are connected for leasing to Telecommunication Operators, is available to them?
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Held that:- The telecommunication towers are used for hoisting e antennae to predetermined and technically viable heights for optimum coverage of the cellular network. The towers are typically erected at the site and also comprise poles for mounting the antennae, sheIters and housing for electrical and telecom equipment. Telecommunication Towers are in the nature of immovable property and are consists of A pre-fabricated shelter made of insulating PUF material made of fibres, Electronic Panel, Base Transceiver Station (BTS)
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dismantled or re-erected at a later place, it will be movable property. But if erected permanently with out being shifted from place to place, then it would be treated as permanently attached to the earth and the same will be treated as immovable property – thus, “telecommunication tower” does not come within the purview of goods in as much as the same being a immovable property and the ITC on “telecommunication tower” is not admissible as per explanation to Section 17(6) of the CGST/SGST Act, 2017.
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The infrastructure provided by the applicant is different from “Telecommunication Tower” in as much as the in infrastructure provided by the applicant does not contain in a. pre-fabricated shelter made of insulating PUF material made of fibres; b. electronic Panel; c. Base Transceiver Station (BTS) and other radio transmission and reception equipment ; d. diesel generator set; the infrastructure is not a immovable property as it can be easily be moved to another place for use without
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for advance ruling constituted under section- 99 of the Uttarakhand Goods and Services Tax Act, 2017, within a period of 30 days from the date of service of this order. RULING 1. This is an application under Sub-Section (1) of Section 97 of the CGST Act and the rules made thereunder filed by M/s. Vindhya Telelinks Ltd. Ground Floor, Wing-B, Commercial Plaza, Hotel Radisson, NH 8, Mahipalpur, New Delhi seeking an advance ruling on the question whether Cenvat credit of goods and services used for erection of infrastructure to which fibre cables are connected for leasing to Telecommunication Operators, is available to them. 2. Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in sub section (2) of section 97 or sub section (1) of section 100 in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 3. As per Section 97(2)(d) of CGST
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her personal hearing was fixed on 28.08.2018 and Shri Sanjay Gupta, Vice President of the applicant attended the hearing on the designated date. 5. In the present application, applicant has requested for advance ruling on admissibility of cenvat credit of goods and services used for erection of infrastructure which is discussed as under : 6.1 Admissibility of ITC of goods & services used for erection of infrastructure for Telecommunication Operators: From the documents submitted by the applicant we find that applicant is registered in Uttarakhand with GSTIN bearing no. 05AAACV7757J1ZY and engaged in providing services including trenching, laying, jointing and installation of cables to companies operating in the telecommunication and power sector. The applicant has obtained Registration for Infrastructure Provider category-1 (IP-1) from Department of Telecommunication, Government of India wherein the scope of activities are limited to establish and maintain assets such as Dark Fibre
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of radio channels of defined frequencies. Elements of the active infrastructure are the base transceiver station (BTS), the base station controller (BSC), the mobile switching centre (MSC) and microwave and GSM antennae. The antenna enable both the transmission and receipt of radio signals, enabling the cellular telephony to proceed uninterrupted as the subscriber is mobile. In contrast, the passive infrastructure comprises the elements which enable the active infrastructure to operate as described above. 6.4 A telecommunication/cell tower houses the electronic communications equipment along with an antenna to support cellular communication in a network. A cell tower is usually an elevated structure with the antenna, transmitters and receivers located at the top. A cell tower also known as cellular tower or cell site. The primary function of a telecommunication/cell tower is to ensure proper elevation to antennas that receive and transmit radio-frequency signals from cell phones and ot
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rt the tower. 6.5 As per applicant, they are engaged in leasing of 'Telecommunication Fibre'. In hilly areas, the telecommunication fibres are kept to be elevated unlike in plain areas where the fibres are put underground. It is only because of this reason the fibres cannot be put underground in the hilly area, they are placed on the poles. The infrastructure so erected by them to elevate the fibre so that Telecommunication Operators can connect the fibre to their Telecommunication Towers . The picture of the said infrastructure is as under: 6.6 The of creation of aerial network done by the applicant is as under: a. The creation of aerial network begin with erection of pole which involves excavation of pit with particular specification, placing of earthing coil in the pit to protect the pole & fibre from damage in the event of lightening. Thereafter muff is installed in the pit, inside which pole is erected. b. After installation of muff, the pole is place inside the muff w
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eptional cases it is 9m. d. The pole along with muff installation can be removed using civil work without any damage to the entire infrastructure. After removal of the said infrastructure, it can be used easily at another location without any damage to the fibre connected to the structure or the structure as a whole. 6.8 To appreciate the law position in this regard, first we have to go through the provisions of Input Tax Credit of CGST/SGST Act, 2017 and the relevant portion of the same are reproduce below: 16. (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. 17 (5) Notwithstanding anything contained in sub-section (1) of section
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he Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or (B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and (iv) travel benefits extended to employees on vacation such as leave or home travel concession; (c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation.-For the purposes of clauses (c) and (d), the e
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structural supports but excludes- (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises. 6.9 The explanation (supra) put restrictions on availment of cenvat credit in respect of apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both in respect of (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises. 6.10 The applicant in their submission has claimed that the infrastructure (supra) provided by them is different from Telecommunication Tower . Thus we are not deciding any wider question but restricting our conclusion to the facts and circumstances which was filed for our consideration in the application. So we have to know about the chrematistics and use of Telecommunication Tower . The details of the same are as under: a. Teleco
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ve, we observe that: a. The poles erected by the applicant are used for stringing of fibres b. Height of the poles varies from 7m to 9m. c. The poles do not contain antennas electronic communications equipment. d. There is no cell site where antennae and electronic communications equipment are placed. e. The infrastructure was affixed to the earth in such a way that without any damage to the entire infrastructure it can be moved to another place for use 6.12 Telecommunication Tower is not defined in CGST/ SGST Act, 2017. So to know what is Telecommunication Tower , we have gone through the Hon ble Gujarat High Court judgment dated 24/25.04.2013 in the case of GTL Infrastructure Ltd. Vs State of Gujarat (Through Secretary). = 2013 (4) TMI 904 – GUJARAT HIGH COURT. The relevant portion of the same is reproduce below: 5. The petitioner is a company registered under the Companies Act. The petitioner is engaged in providing infrastructure for Mobile Telecommunication Services. The petitione
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Telecommunications Ministry of Communications & IT, Government of India and titled as Mobile Communication Radio Waves & Safety, in which it is stated as under : Cellular Phone tower & waves Mobile phone base stations are radio transmitter with antennas mounted on either transmission towers or roof tops on buildings. The antennas need to be located at optimum locations and heights so they can adequately cover the area. Antenna position usually range in height from 50-200 feet. When a person makes a cell phone call, a signal is sent from the mobile phone s antenna to the nearest base station antenna. The base station responds to this signal by assigning it an available radio frequency channel. RF waves transfer the information to the base station. The voice/data signals are then sent to a switching center, which transfers the call to its destination. The voice signals are then relayed back and forth during the call. In India mobile phones operate in the frequency range of :
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is reduced to ¼ when the distance from the antenna double and to 1/9 when the distance is three times. 6.13 The hon ble Supreme Court of India in civil appeal nos.5360 -5363 of 2013 in the case of Ahmadabad Municipal Corporation versus GTL Infrastructure Ltd. & ors. = 2016 (12) TMI 1092 – SUPREME COURT also confirm the fact of hon'ble Gujarat High Court (supra). The relevant portion of the same is reproduce below: 22. We may now see what a Mobile Tower is and consists of. In technical terms a Mobile Tower is called a Base Transceiver Station. It involves the making of structure consisting of the following: a. A pre-fabricated shelter made of insulating PUF material made of fibres. b. Electronic Panel. c. Base Transceiver Station (BTS) and other radio transmission and reception equipment. d. A diesel generator set. e. Six poles of 6 to 9 meters length each made of hollow steel galvanized pipes. 6.14 In light of above we observe that the telecommunication towers are used f
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mposition of the antenna themselves and could not be construed as components or parts thereof. We further observed that only telecom equipments like BTS transmitters which are used in providing telecom services alone would be liable to input credit. The towers and PFB are in the nature of immovable goods hence, ITC not admissible on the same. 6.16 We find that immovable property has not been defined in CGST/SGST Act, 2017. So we have. to go through the Section 3 of General Clauses Act, 1897, the relevant portion of the same is reproduce below: (26) immovable property shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth; (36) movable property shall mean property of every description, except immovable property; 6.17 We also find that the hon'ble High Court of Bombay in Central Excise Appeal no. 73 & 119 of 2012 in the case of Bharti Airtel = 2014 (9) TMI 38 – BOMBAY HIGH COURT, decided the c
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e earth and the same will be treated as immovable property. 6.20 Thus we observe that telecommunication tower does not come within the purview of goods in as much as the same being a immovable property and the ITC on telecommunication tower is not admissible as per explanation to Section 17(6) of the CGST/SGST Act, 2017. 6.21 In view of the above discussion we observe that the infrastructure provided by the applicant is different from Telecommunication Tower in as much as (i) the in infrastructure provided by the applicant does not contain in a. pre-fabricated shelter made of insulating PUF material made of fibres; b. electronic Panel; c. Base Transceiver Station (BTS) and other radio transmission and reception equipment ; d. diesel generator set; (ii) the infrastructure is not a immovable property as it can be easily be moved to another place for use without any damage to the entire infrastructure. Therefore the infrastructure provided by the applicant is to be construed as movable pr
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