SC ruling on tax credits on infrastructure duties will reduce financial burden on sector COAI

New Delhi, Nov 20 (PTI) Supreme Court verdict granting telecom companies the right to claim tax credits on infrastructure duties will not only aid compliances but also reduce the financial burden on the sector, industry body COAI said on Wednesday.
     The verdict reinforces fairness and consistency in taxation, SP Kochhar, Director General of COAI said in a statement.
    "We welcome the Supreme Court’s judgement affirming the telecom industry’s entitlement to claim the credit for taxes and duties paid on towers and its parts - including green shelters," Kochhar said.
    The apex court's judgement will not only help the industry in fulfilling compliances but will also help reduce the financial burden on the sector, he noted.
    Prachur Sah, MD and CEO, Indus Towers said the "pivotal" ruling will have a positive impact on the company's financial exposure.
    "Through this landmark judgement, the Supreme Court while upholding Delhi High Court's decision in our favour, has allowed CENVAT credit inter-alia on towers and shelters. This pivotal ruling will have a positive impact on our company's financial exposure," Sah said.
    He added: "With this favourable outcome and a settled tax position, we are poised to continue advancing digital infrastructure growth across the country.
     In a relief to mobile service providers, the Supreme Court on Wednesday held that the telecom companies can take the benefit of CENVAT credit for payment of service tax on the output services rendered by them.
     The CENVAT Credit Rules of 2004 refers to the set-off available to manufacturers if they utilise some specific inputs procured by them after paying excise duties for manufacturing their products.
     The top court's verdict held that mobile service providers are also covered under the CENVAT credit rules as they pay excise duties on various items for setting up their business more particularly for erection of mobile towers and peripherals like pre-fabricated buildings (PFBs).

(This story has not been edited by THE WEEK and is auto-generated from PTI)