The GST circular clarifies the input tax credit (ITC) eligibility for ducts and manholes used in optical fiber cable (OFC) networks. Some tax authorities had denied ITC on these items, arguing they fall under the CGST Act’s restriction on immovable property. However, the circular confirms that ducts and manholes are considered “plant and machinery” because they are essential for laying and maintaining OFC networks, and are not classified as land, buildings, or civil structures.

Section 17(5) of the CGST Act generally restricts ITC for construction of immovable property, but ducts and manholes are not excluded under this definition. As these components are used for telecommunications and are integral to providing services, they are eligible for ITC. This clarification aims to prevent disputes and ensure consistent application of GST rules.