This circular provides clarification regarding the eligibility of input tax credit (ITC) on ducts and manholes used in the network of optical fiber cables (OFCs) under Section 17(5) of the Central Goods and Services Tax (CGST) Act, 2017.

It explains that ducts and manholes form essential components of the OFC network used in telecommunication services, serving as housing and connection nodes for optical fiber cables. Since these structures are used for making outward supplies and are fixed to the earth as part of the functioning network, they fall within the definition of “plant and machinery” as per the Explanation to Section 17 of the CGST Act.

The circular clarifies that ducts and manholes are not excluded from this definition, as they are neither land, buildings, nor civil structures, and do not constitute telecommunication towers or pipelines laid outside factory premises. Accordingly, ITC on ducts and manholes used in OFC networks is not restricted under clauses (c) or (d) of Section 17(5) of the CGST Act.