Landfill pit treated as civil structure, so input tax credit was blocked under GST

A landfill pit constructed for hazardous waste disposal was treated as immovable property because it is an engineered pit embedded in the earth with lining and leachate treatment arrangements. The Authority construed "plant and machinery" under GST as an exhaustive definition and held that the exclusion of land, building and civil structures applies for section 17(5)(d) as well. Income-tax meanings of "plant" were held inapplicable in the GST context, so the pit was classified as a civil structure, not apparatus or machinery. Input tax credit was therefore blocked under section 17(5)(d).

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Issues: Whether the land filling pit constructed for hazardous waste disposal is a "plant or machinery" so as to qualify for input tax credit, or whether it is an immovable civil structure covered by the block under section 17(5)(d) of the CGST Act.

Analysis: The Authority examined the nature and construction of the landfill pit and held that it is an engineered pit embedded in the earth, lined with geosynthetic and HDPE materials, with leachate collection and treatment arrangements. On that basis, it was treated as immovable property within the meaning of the general law on immovable property. The expression "plant and machinery" in the GST law was construed as an exhaustive definition, and the exclusion of land, building and civil structures was held to govern the meaning of "plant or machinery" for section 17(5)(d) as well. The Authority distinguished the income-tax decisions relied upon by the appellant, held that the broader income-tax meaning of "plant" could not be imported into the GST context, and concluded that the landfill pit is more appropriately a civil structure than an apparatus, equipment or machinery.

Conclusion: The landfill pit is not a plant or machinery for the purpose of input tax credit and the credit is blocked under section 17(5)(d) of the CGST Act. The issue is decided against the assessee.

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