ITC Availability on Ducts and Manholes for OFC Networks under Section 17(5) of CGST Act, 2017

Last updated: 28 June 2024

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This notification clarifies the availability of Input Tax Credit (ITC) on ducts and manholes used for Optical Fiber Cable (OFC) networks. Previously, some tax authorities denied ITC on these items, considering them as immovable property blocked under Section 17(5) of the CGST Act. The Central Board of Indirect Taxes and Customs (CBIC) has issued this clarification to ensure consistent application of the law and prevent disputes within the telecommunication sector.

F. No. CBIC-20001/4/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****

North Block, New Delhi,
Dated the 26th June, 2024

To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification on availability of input tax credit on ducts and manholes used in network of optical fiber cables (OFCs) in terms of section 17(5) of the CGST Act, 2017 -reg.

Representations have been received from Cellular Operators Association of India (COAI) submitting that input tax credit (ITC) is being denied by some tax authorities on ducts and manholes used in network of optical fiber cables (OFCs)on the ground that the same is blocked as per section 17(5) of the Central Goods &Services Tax Act, 2017 (herein after referred to as the ‘CGST Act”), being in nature of immovable property (other than Plant and Machinery). It has been requested to issue clarification in respect of availability of ITC on ducts and manholes used in network of optical fiber cables (OFCs), so as to prevent unwarranted litigation in the telecommunication sector across the country.

2. In order to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby clarifies the issue as below.

For full notification please refer to the attachment.

FAQ :

The notification clarifies the availability of Input Tax Credit (ITC) on ducts and manholes used in Optical Fiber Cable (OFC) networks under Section 17(5) of the CGST Act, 2017.

Clarification was requested because some tax authorities were denying ITC on ducts and manholes for OFC networks, considering them blocked under Section 17(5) as immovable property.

The clarification has been issued by the Central Board of Indirect Taxes and Customs (CBIC) of the Ministry of Finance, Government of India.

The purpose is to ensure uniform implementation of the law across all tax formations and to prevent unnecessary litigation in the telecommunication sector.

For the complete details, please refer to the attachment mentioned in the notification.