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Circular No. 219/13/2024-GST
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 26
th
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.
Issue Clarification
Whether the input tax
credit on the ducts and
manholes used in
network of optical fiber
1. Sub-section (5) to Section 17 of the CGST Act provides
that input tax credit shall not be available, inter alia, in respect
of the following:

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cables (OFCs) for
providing
telecommunication
services is barred in
terms of clauses (c) and
(d) of sub-section (5) of
section 17 of the CGST
Act, read with
Explanation to section
17 of CGST Act ?
i. works contract services when supplied for
construction of an immovable property (other than
plant and machinery) except where it is an input
service for further supply of works contract service;
or
ii. goods or services or both received by a taxable
person for construction of an immovable property
(other than plant or machinery) on his own account
including when such goods or services or both are
used in the course or furtherance of business.
2. Explanation in section 17 of CGST Act provides that the
expression "plant and machinery" means apparatus,
equipment, and machinery fixed to earth by foundation or
structural support that are used for making outward supply of
goods or services or both and includes such foundation and
structural supports but excludes land, building or any other
civil structures; telecommunication towers; and pipelines laid
outside the factory premises.
3. Ducts and manholes are basic components for the optical
fiber cable (OFC) network used in providing
telecommunication services. The OFC network is generally
laid with the use of PVC ducts/sheaths in which OFCs are
housed and service/connectivity manholes, which serve as
nodes of the network, and are necessary for not only laying of
optical fiber cable but also their upkeep and maintenance. In
view of the Explanation in section 17 of the CGST Act, it
appears that ducts and manholes are covered under the
definition of “plant and machinery” as they are used as part of
the OFC network for making outward supply of transmission
of telecommunication signals from one point to another.
Moreover, ducts and manholes used in network of optical
fiber cables (OFCs) have not been specifically excluded from

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the definition of “plant and machinery” in the Explanation to
section 17 of CGST Act, as they are neither in nature of land,
building or civil structures nor are in nature of
telecommunication towers or pipelines laid outside the factory
premises.
4. Accordingly, it is clarified that availment of input tax
credit is not restricted in respect of such ducts and manhole
used in network of optical fiber cables (OFCs), either under
clause (c) or under clause (d) of sub-section (5) of section 17
of CGST Act.

3. It is requested that suitable trade notices may be issued to publicize the contents of
this Circular.

4. Difficulty, if any, in the implementation of this Circular may be brought to the notice
of the Board. Hindi version would follow.



(Sanjay Mangal)
Pr. Commissioner (GST)