Aafrin Kidwai 
The Karnataka Authority of Advance Ruling (AAR) has ruled that landfill-pit is not a ‘plant and machinery’ but a ‘civil-structure’.
The ruling was made in the case of the applicant, M/S Mother Earth Environ Tech Pvt Ltd. which obtained land on lease from the Government and constructed a landfilling pit for processing and disposal of solid waste. On completion of filling the landfill pit (closed and sealed as per the environmental guidelines and maintained for further 30 years), the applicant contended that the landfill pit is plant and machinery and they have capitalised the same in their books of accounts.
Further, they claimed depreciation under the income tax excluding the GST paid thereon. The applicant sought advance ruling on the issue that whether the term other civil structure used in the definition of Plant and Machinery restricts the Land filling it from considering it as Plant & Machinery and thereby restricts ITC to be availed on it.
The two-member bench of M.P. Ravi Prasad and Mashood ur Rehman Farooqui ruled that landfilling pits used for treatment, storage, and disposal of hazardous waste cannot be called as plant and machinery even if capitalized as such owing to significant earthwork. It has been distinguished from apparatus or equipment as also structural support.
The full order document is available here.
Photo Credit: Green Dream Foundation
