Input tax credit denied for landfill pit construction treated as immovable civil structure, not plant and machinery.

A landfill pit built for hazardous waste treatment and disposal was treated as an immovable civil structure, not plant and machinery. The authority applied the input tax credit bar for goods or services used in construction of immovable property on own account, noting that plant and machinery covers apparatus, equipment or machinery fixed to earth, but excludes land, building and other civil structures. As the pit comprised earthwork, liners, drainage, leachate collection, monitoring and closure systems, it was held to be civil engineering work rather than machinery. Input tax credit on its construction was therefore not available.

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Issues: Whether a landfill pit constructed for hazardous waste treatment and disposal qualifies as plant and machinery, or whether it is an immovable civil structure so as to exclude input tax credit under Section 17(5)(d).

Analysis: The relevant exclusion denies input tax credit on goods or services used for construction of an immovable property on own account, other than plant and machinery. Plant and machinery, for this purpose, means apparatus, equipment, or machinery fixed to earth by foundation or structural support and used for making outward supplies, but it excludes land, building, and other civil structures. The landfill pit was found to be a combination of earthwork and construction below ground, comprising liners, drainage, leachate collection, monitoring, and closure systems. It was not apparatus, equipment, or machinery in itself, nor merely a structural support for such apparatus. On the material placed, the pit was held to be civil engineering work creating a civil structure. The authority also held that the construction was undertaken on the applicant's own account, and therefore the statutory bar applied.

Conclusion: The landfill pit is not plant and machinery and input tax credit on its construction is not available.

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