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Allowing CENVAT credit on telecom towers will ease telcos’ burden, says TAIPA

November 21, 2018
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The inputs tax credit allowed by the Delhi high court to telecom infrastructure companies would help telecom service providers in shedding additional financial burden.

Last week, the Delhi high court allowed CENVAT credit or Central Value Added Tax on telecom towers and parts including pre-fabricated shelters-- which was under dispute between the tax authorities which argued that on the ground of ‘immovable’ nature of equipment, the tower firms did not qualify for input tax credit.

As per Tilak Raj Dua, Director General, Tower and Infrastructure Providers Association (TAIPA), "The availability of Input tax credit (CENVAT credit) mechanism will reduce overall billing by IP-1s to telecom service providers."

As per the industry body, the telecom infrastructure industry makes a direct contribution of more than Rs 50 billion annually in corporate income tax and service tax and invests more than Rs 100 billion annually in equipment procurement such as towers, shelters, batteries, air-conditioners, DG sets and power management systems.

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