GST Input Tax Credit on Land Filling Pits: KAR/ADRG/46.1/2020
The Karnataka Authority for Advance Ruling decided that land filling pits are civil structures and ineligible for GST input tax credit.
- Ruling
- Advance Ruling No. KAR ADRG 46.1/2020 dated 30-07-2021
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Mother Earth Environ Tech asked if a land filling pit is plant and machinery.
- The authority ruled the pit is a civil structure, not plant and machinery.
- Input tax credit on construction costs for the pit is blocked under GST law.
In short
The company asked if they could claim input tax credit (ITC) on the construction of a land filling pit used for waste management. They argued the pit functions as machinery, but the tax authority disagreed, classifying it as a civil structure instead.
What has changed
How it worked before
Businesses were uncertain if large-scale industrial pits could be classified as plant and machinery to claim tax credits on construction expenses.
What has changed
The authority confirmed that pits embedded in the earth are immovable civil structures. Under Section 17(5)(d) of the Central Goods and Services Tax (CGST) Act, you cannot claim input tax credit on goods or services used to construct immovable property.
Who this affects
Waste management companies and businesses building large-scale industrial pits or similar civil infrastructure.
An example
GreenWaste Solutions builds a new hazardous waste disposal pit. They want to claim the GST paid on cement and engineering services as input tax credit. Based on this ruling, they should expect their claim to be rejected because the pit is considered a civil structure, not machinery.
What you should do
Do not assume you can claim input tax credit on similar construction projects. This ruling only binds the company that asked; your local tax officer may still have a different view, but this decision shows how the department interprets the law.
If you do nothing
If you claim input tax credit on such structures and the tax department disagrees, they may issue a demand notice for the tax amount plus interest and penalties. Relying on a ruling that does not apply to your specific case can lead to costly legal disputes.
The terms explained
- Input Tax Credit (ITC)
- The tax a business pays on its purchases that it can use to reduce the tax it owes on its own sales.
- Civil Structure
- A construction project, such as a building or a pit, that is fixed to the ground and is not considered movable machinery.
- Plant and Machinery
- Equipment or apparatus used for business operations that is generally eligible for tax credits, excluding land, buildings, and civil structures.
The ruling in detail
Authority for Advance Ruling
M/s. Mother Earth Environ Tech Pvt Ltd.
Advance Ruling No. KAR ADRG 46.1/2020 dated 30-07-2021 · Karnataka
Questions before the authority
- Whether the term 'other civil structure' used in the definition of 'Plant and Machinery' restricts the Land filling Pit from considering it as Plant & Machinery and thereby restricts ITC to be availed on it.
Facts
The applicant is engaged in the business of solid waste management and has constructed a land filling pit for the processing and disposal of hazardous waste. They sought an advance ruling on whether they are eligible to claim Input Tax Credit (ITC) on the goods and services used for the construction of this land filling pit. The applicant contends that the pit qualifies as 'plant and machinery' and is not an excluded 'civil structure' under the GST law.
Ruling
| Question | What the authority ruled |
|---|---|
| Eligibility of ITC on Land filling Pit | The Landfilling pit is a civil structure and not a plant or machinery. ITC is not available under Section 17(5)(d) of the CGST Act, 2017. |
The Authority for Advance Ruling held that the land filling pit is a civil structure and does not qualify as plant and machinery. Consequently, the applicant is not entitled to claim input tax credit on the goods and services used for its construction. The ruling emphasizes that the structure is an immovable property excluded from the definition of plant and machinery.
Reasoning
The Authority relied on the definition of 'plant and machinery' provided in the Explanation to Section 17(5) of the CGST Act, 2017, which explicitly excludes 'land, building or any other civil structures'. It observed that the land filling pit involves extensive civil engineering work and is embedded in the earth, thereby attaining the character of an immovable property. The Authority concluded that the structure does not meet the criteria for 'plant and machinery' and falls squarely within the exclusion clause for civil structures. Therefore, the input tax credit is blocked under Section 17(5)(d) of the CGST Act.
Provisions relied on
- Section 17(5)(d) of the CGST Act, 2017
- Section 17(5)(d) of the KGST Act, 2017
- Section 98(4) of the CGST Act, 2017
- Section 98(4) of the KGST Act, 2017
For the practitioner
This ruling clarifies that **land filling pits** are considered **civil structures** and are ineligible for ITC under the GST regime. It serves as a negative precedent for taxpayers attempting to classify large-scale environmental infrastructure as 'plant and machinery' to bypass the **Section 17(5)(d) exclusion**. Practitioners should note that this ruling reinforces a strict interpretation of the exclusion clause for immovable property.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/kar_aar_46.1_2020_motherearthenvirontechpvtltd.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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