Supreme Court Verdict: Telecoms Gain CENVAT Credit For Mobile Towers

The Supreme Court ruled that telecoms can claim CENVAT credit for excise duties related to mobile towers and peripherals. This settled a long-standing legal dispute, aligning with the Delhi High Court's decision against the Bombay High Court, asserting these items are 'capital goods' under relevant rules.

In a decisive ruling on Wednesday, the Supreme Court provided a significant relief to the telecom industry by affirming that mobile service providers are entitled to CENVAT credit on excise duties for mobile towers and accessories.

The court's judgment resolves a decade-long legal conflict, contrasting conflicting views from the Delhi and Bombay High Courts regarding what constitutes 'capital goods' under the CENVAT Credit Rules of 2004.

This verdict has broad implications, as it confirms that towers and pre-fabricated buildings, used for telecom services, qualify for tax credits, further supporting infrastructure costs for mobile networks.

(With inputs from agencies.)