CBIC Circular No. 219/13/2024-GST: Input Tax Credit on OFC Ducts & Manholes Clarified

editor — Thu, 27 Jun 2024 07:15:09 +0000

CBIC has issued Circular No. 219/13/2024-GST dated June 26, 2024, clarifying the availability of input tax credit (ITC) on ducts and manholes used in the network of optical fiber cables (OFCs) under section 17(5) of the CGST Act, 2017.

The Circular addresses concerns raised by the Cellular Operators Association of India (COAI) regarding the denial of ITC by some tax authorities on ducts and manholes, citing them as immovable property ineligible for credit under section 17(5) of the CGST Act. COAI sought clarity to avoid unnecessary litigation in the telecommunications sector.

Key clarifications provided include:

Ducts and manholes used in the OFC network are essential components for providing telecommunication services. They facilitate the laying, maintenance, and connectivity of optical fiber cables (OFCs).
According to the Explanation in section 17 of the CGST Act, "plant and machinery" includes equipment and apparatus fixed to the earth by foundation or structural support, used for making outward supplies of goods or services. This definition excludes land, buildings, civil structures, telecommunication towers, and pipelines outside factory premises.
Ducts and manholes used in the OFC network are integral parts of the "plant and machinery" definition, as they support the transmission of telecommunication signals from one point to another. They are neither categorized as land, buildings, civil structures, nor telecommunication towers or pipelines outside factory premises.
Therefore, input tax credit on ducts and manholes used in the network of optical fiber cables (OFCs) is not restricted under clauses (c) or (d) of sub-section (5) of section 17 of the CGST Act.

The Circular aims to ensure uniform interpretation and implementation of GST provisions across field formations and suggests dissemination through appropriate trade notices.

For more details, refer to the Circular here

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CBIC Circular No. 219/13/2024-GST: Input Tax Credit on OFC Ducts & Manholes Clarified

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