Input tax credit— Section 17(5) of CGST Act— In the instant case ,the applicant is into the business of Treatment, Storage and Disposal Facility (TSDF) of hazardous waste and has constructed a Land filling Pit for processing and Treatment, Storage and Disposal of Hazardous Waste. The applicant has capitalized the land filling Pit as Plant and Machinery and consider itself to be eligible to claim ITC on the material and services utilized for its construction.
The applicant, in their submissions, basically emphasized on three aspects, i.e. denying the ITC on landfill pit which is used for outward taxable supply is against the spirit of the Act and would result in cascading effect. Secondly, land filling pit is an apparatus fixed to the earth with the help of structural support and for that reason can be called plant & machinery. Lastly, it is not a civil structure.
Section 17(5)(d) of the CGST Act, 2017 denies availment of ITC on goods and services when supplied for construction of an immovable property (other than plant and machinery) on his own account including when such goods or services or both are used in the furtherance of business.
The explanation given at the end of Section 17(5) of CGST Act, 2017 defines plant and machinery as 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 structure. We find that land filling pit is a combination of earth work and other capital goods as given in the brief submitted by the applicant. It can't solely or in itself be identified as apparatus, equipment and machinery fixed to earth by foundation. It is also not a structural support for anything. Therefore, we do not agree with the applicant's view that the land filling pit falls under plant and machinery.
Held that— The Landfilling pit is a civil structure not a plant or machinery for the purpose of Chapter V and Chapter VI of the GST Act.