The Goods and Services Tax Appellate Tribunal (GSTAT) Principal Bench has directed the concerned State Benches not to pass any order on the merits of appeals involving Reliance Jio Infocomm Limited’s entitlement to input tax credit on the setting up of telecommunication towers.
The bench of Justice (Retd.) Dr Sanjaya Kumar Mishra, President of the GSTAT Principal Bench, issued the interim direction while considering applications filed under Section 109(5) of the CGST Act seeking the transfer of cases pending before different State Benches.
The dispute centres on whether input tax credit (ITC) relating to the establishment of telecom towers can be blocked under Section 17(5) of the Central Goods and Services Tax Act, 2017.
The transfer applications were filed on the ground that the pending appeals involved an identical question of law. The Principal Bench recorded the common legal issue as:
“Whether ITC on setting up of telecommunication towers can be blocked u/s 17(5) of the CGST Act, 2017.”
The controversy assumes significance because Section 17(5) specifies categories of supplies for which input tax credit is restricted, notwithstanding the general entitlement available under Section 16 of the CGST Act. Disputes concerning telecom infrastructure frequently turn on whether towers and related installations are to be treated as immovable property and, consequently, whether the statutory restriction on ITC applies.
At this stage, however, the Tribunal has not decided whether Reliance Jio is entitled to claim the disputed credit. The present order is confined to the transfer applications and the preservation of the appeals until the jurisdictional issue is considered.
The Principal Bench observed that, prima facie, the second appeals filed under Section 112(1) of the CGST Act appeared to involve an identical question of law. It accordingly issued notices to the respective Commissionerates, calling upon them to explain why the appeals should not be transferred to the Principal Bench for consideration and final disposal on merits.
The Tribunal ordered that notices be served through three separate modes—through the GST portal, by email and by speed post with acknowledgement due. Counsel appearing for the appellants undertook to file the complete procedural steps, including the necessary postal requisites, within ten days.
The notices have been made returnable within four weeks.
The Principal Bench directed the respective GSTAT State Benches not to pass any order on the merits of the underlying appeals in the meantime. This direction effectively maintains the existing position until the Principal Bench decides whether the matters should be consolidated and transferred.
The registries of the concerned State Benches were nevertheless directed to complete scrutiny and stamp reporting at the earliest. The Registry of the Principal Bench was asked to communicate the interim directions to the respective State Benches.
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