Executive Summary:
This document contains two orders from the Ministry of Finance, Department of Revenue, concerning the Central Goods and Services Tax (CGST) and the Union Territory Goods and Services Tax (UTGST). These orders, effective April 1, 2019, clarify the method for determining input tax credit for specific service supplies, namely construction services. The orders address difficulties in interpreting Section 17 of both the CGST Act, 2017 and the UTGST Act, 2017.
Key Points / Main Content:
* **Order Titles and Acts:**
* Central Goods and Services Tax Fourth Removal of Difficulties Order, 2019.
* Union Territory Goods and Services Tax Third Removal of Difficulties Order, 2019.
* Reference is made to the Central Goods and Services Tax Act, 2017 and the Union Territory Goods and Services Tax Act, 2017.
* **Clarification on Input Tax Credit:**
* For services covered by clause (b) of paragraph 5 of Schedule II of the Acts, the input tax credit attributable to taxable supplies (including zero-rated and exempt supplies) will be based on the area of construction.
* The credit will be determined by comparing the area of the complex, building, or civil structure that is taxable to the area that is exempt.
* **Effective Date:**
* Both orders are effective from April 1, 2019.
Impact Analysis:
**Central Government:**
* *Impact:* Responsible for implementing and enforcing the clarified rules regarding input tax credit calculations.
* *Action Required:* Ensure that tax officials are aware of the clarification and apply it correctly.
**Taxpayers (Suppliers of Construction Services):**
* *Impact:* Need to calculate input tax credit based on the area of construction that is taxable versus exempt.
* *Action Required:* Adjust accounting and tax calculation methods to comply with the new clarification.
**Tax Council:**
* *Impact:* Recommendations from the council led to the creation of this order.
* *Action Required:* Monitor the impact of the order and consider further clarifications if needed.
Key Entities Referenced
Central Goods and Services Tax Act, 2017: A tax law in India, cited in the context of input tax credit restrictions and taxable supplies.
Central Goods and Services Tax Fourth Removal of Difficulties Order, 2019: An order issued by the Central Government of India to clarify difficulties in implementing the Central Goods and Services Tax Act, 2017.
Union Territory Goods and Services Tax Act, 2017: A tax law related to Union Territories in India, cited in the context of input tax credit restrictions and taxable supplies.
Union Territory Goods and Services Tax Third Removal of Difficulties Order, 2019: An order issued by the Central Government of India to clarify difficulties in implementing the Union Territory Goods and Services Tax Act, 2017.
Ministry of Finance: The government ministry responsible for revenue and taxation matters.
Department of Revenue: A department under the Ministry of Finance.
Council: The body that makes recommendations to the Central Government regarding the Goods and Services Tax.
PRAMOD KUMAR: Deputy Secretary in the government, as indicated by the signature block.
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PART II—Section 3—Sub-section (ii)
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आआआआददददशशेेशशेे
नई (cid:4)द(cid:6)ली, 29 माच,(cid:14) 2019
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ककककेेेे(cid:14)(cid:14)(cid:14)(cid:14)(cid:15)(cid:15) (cid:15)(cid:15) ीीीीयययय ममममाााालललल एएएएवववव ंं ंंससससववववेेेे ाााा ककककरररर ((((कककक(cid:17)(cid:17)(cid:17)(cid:17)ठठठठननननााााइइइइयययय(cid:21)(cid:21)(cid:21)(cid:21) ककककाााा ििििननननररररााााककककररररणणणण)))) आआआआददददशशेेशशेे ,,,, 2222000011119999
ककककाााा....आआआआ.... 1111444499992222((((अअअअ))))....————जब(cid:4)क, के(cid:19)(cid:20) ीय माल एवं सेवा कर अिधिनयम, 2017 (2017 का 12) (एति(cid:26)मनप(cid:26) चात ् इस
आदशे म (cid:30) “उ(cid:31)त अिधिनयम” के प म (cid:30) सदं #भ(cid:14)त) क% धारा 17 क% उप-धारा (2) म (cid:30) +ावधान ह ै (cid:4)क इनपुट टै(cid:31)स 2ेिडट इतने
इनपुट टै(cid:31)स तक सीिमत रहगे ा, जो करधान आप#ू त(cid:14) के कारण होता ह;ै और
और जहाँ (cid:4)क उ: अिधिनयम क% धारा 17 क% उप-धारा (3) म (cid:30) +ावधान ह ै (cid:4)क उ: अिधिनयम क% धारा 17 क%
उपधारा (2) के उ=े(cid:26)य के िलए मू(cid:6)य वही होगा जो (cid:4)क िनयम> के ?ारा िनधा@(cid:14) रत (cid:4)कया जायेगा;
अत:, अब, उ(cid:31)त अिधिनयम क% धारा 172 ?ारा +दAत शि:य> का +योग करते Bए, के(cid:19) (cid:20)ीय सरकार, प@रषद क%
िसफा@रश> पर, एतEारा िनFन िलिखत आदशे करती ह,ै अथात(cid:14) :् -
1111.... ललललघघघघ ुु ुुशशशशीीीीषषषषकक(cid:24)(cid:24)कक(cid:24)(cid:24) –––– यह आदशे के(cid:19)(cid:20) ीय माल एवं सेवा कर (क@ठनाइय> का चौथा िनराकरण) आदशे , 2019 कहलाएगा ।
2. क@ठनाइय> के िनवारण के िलए एतEारा यह J पK ट (cid:4)कया जाता ह ै (cid:4)क उ: अिधिनयम क% अनुसूची II के
पैराLाफ 5 के उपवा(cid:31)य (ख) के अंतग(cid:14)त आन े वाली सेवाO क% आप#ू त (cid:14) के मामल े म,(cid:30) िजनपर कर लगता हो, िजनम (cid:30) (cid:4)क जीरो
रेटेड आप#ू त(cid:14)याँ और छूट +ाR आपू#त(cid:14)याँ भी आती ह,S से संबंिधत 2ेिडट रािश का िनधार(cid:14) ण उस कॉFपले(cid:31)स, िबU(cid:6)डगं , िसिवल
JVकचर के या उसके िहJस ेके िनमाण(cid:14) के WेXफल पर आधा@रत होगा जो (cid:4)क कर योYय ह ैऔर छूट +ाR ह ै।
3. यह आदशे 1 अ+लै , 2019 से +भावी होगा ।
[फा. सं. 354/32/2019-टीआरयू]
+मोद कुमार, उप सिचव
1956 GI/2019 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
MINISTRY OF FINANCE
(Department of Revenue)
ORDER
New Delhi, the 29th March, 2019
No. 04/2019-Central Tax
THE CENTRAL GOODS AND SERVICES TAX (REMOVAL OF DIFFICULTIES) ORDER, 2019
S.O. 1492(E).—Whereas, sub-section (2) of section 17 of the Central Goods and Services Tax
Act, 2017 (12 of 2017) (hereafter in this Order referred to as the “said Act”) provides that the input tax credit
shall be restricted to so much of input tax as is attributable to the taxable supplies;
And whereas sub-section (3) of section 17 of said Act provides that the value for the purpose of sub-
section (2) of section 17 of the said Act shall be such as prescribed by rules;
Now, therefore, in exercise of the powers conferred by section 172 of the said Act, the Central
Government, on recommendations of the Council, hereby makes the following Order, namely:-
1. Short title.—This Order may be called the Central Goods and Services Tax (Fourth Removal of
Difficulties) Order, 2019.
2. For the removal of difficulties, it is hereby clarified that in case of supply of services covered by clause (b)
of paragraph 5 of Schedule II of the said Act, the amount of credit attributable to the taxable supplies
including zero rated supplies and exempt supplies shall be determined on the basis of the area of the
construction of the complex, building, civil structure or a part thereof, which is taxable and the area which is
exempt.
3. This Order shall come into force with effect from the 1st day of April, 2019.
[F. No. 354/32/2019-TRU]
PRAMOD KUMAR, Dy. Secy.
आआआआददददशशेेशशेे
नई (cid:4)द(cid:6)ली, 29 माच,(cid:14) 2019
सससस..ंं..ंं 00003333////2222000011119999---- ससससघघंंघघंं रररराााा(cid:26)(cid:26)(cid:26)(cid:26)यय यय (cid:27)(cid:27)(cid:27)(cid:27)े(cid:8)े(cid:8)े(cid:8)े(cid:8) ककककरररर
ससससंघंघंघंघ रररराााा(cid:26)(cid:26)(cid:26)(cid:26)यय यय (cid:27)(cid:27)(cid:27)(cid:27)(cid:8)(cid:8)ेे(cid:8)(cid:8)ेे ममममाााालललल एएएएवववव ंंंंससससववेेववेे ाााा ककककरररर ((((कककक(cid:17)(cid:17)(cid:17)(cid:17)ठठठठननननााााइइइइयययय(cid:21)(cid:21)(cid:21)(cid:21) ककककाााा ििििननननररररााााककककररररणणणण)))) आआआआददददशशेेशशेे ,,,, 2222000011119999
ककककाााा....आआआआ.... 1111444499993333((((अअअअ))))....————जब(cid:4)क, के(cid:19)(cid:20) ीय माल एव ंसेवा कर अिधिनयम, 2017 (2017 का 12) (एति(cid:26)मन प(cid:26) चात ्िजस े
“उ(cid:31)त अिधिनयम” स े संद#भत(cid:14) (cid:4)कया गया ह)ै क% धारा 17 क% उप-धारा (2) के साथ प@ठत संघ रा\ यWXे माल एवं सेवा कर
अिधिनियम, 2017 (2017 का 14) क% धारा 21 के खंड (v) म (cid:30) +ावधान ह ै (cid:4)क इनपुट टै(cid:31)स 2ेिडट इतन े इनपटु टै(cid:31)स तक
सीिमत रहगे ा, जो करधान आप#ू त (cid:14)के कारण होता ह;ै
और जहाँ (cid:4)क उ: अिधिनयम क% धारा 17 क% उप-धारा (3) के साथ प@ठत संघ रा\ यWेX माल एवं सेवा कर
अिधिनयम, 2017 (2017 का 14) क% धारा 21 के खंड (v) म(cid:30) +ावधान ह ै(cid:4)क उ: अिधिनयम क% धारा 17 क% उपधारा (2)
के उ=े(cid:26)य के िलए मू(cid:6)य वही होगा जो (cid:4)क िनयम> के ?ारा िनधा(cid:14)@रत (cid:4)कया जायेगा;
अत:, अब, संघ रा\य WेX माल एव ं सेवा कर अिधिनयम, 2017 (2017 का 14) क% क% धारा 26 ?ारा +दAत
शि:य> का +योग करते Bए, के(cid:19)(cid:20) ीय सरकार, प@रषद ्क% िसफा@रश> पर, एतद?् ारा िनिF(cid:19) लिखत आदशे करती ह,ै अथा(cid:14)त ् :-
1111.... ललललघघघघ ुु ुु शशशशीीीीषषषषकककक(cid:24)(cid:24)(cid:24)(cid:24) ––––यह आदशे सघं रा\ यWेX माल एवं सवे ा कर (क@ठनाइय> का तीसरा िनराकरण) आदशे , 2019
कहलाएगा ।
2. क@ठनाइय> के िनवारण के िलए एतद्?ारा यह J पK ट (cid:4)कया जाता है (cid:4)क उ: अिधिनयम क% अनुसचू ी II के
पैराLाफ 5 के उपवा(cid:31)य (ख) के अंतग(cid:14)त आन े वाली सेवाO क% आप#ू त (cid:14) के मामल े म,(cid:30) िजनपर कर लगता हो, िजनम(cid:30) (cid:4)क जीरो
रेटेड आप#ू त(cid:14)याँ और छूट +ाR आपू#त(cid:14)याँ भी आती ह,S से संबंिधत 2ेिडट रािश का िनधार(cid:14) ण उस कॉFपले(cid:31)स, िबU(cid:6)डगं , िसिवल
JVकचर के या उसके िहJस ेके िनमाण(cid:14) के WेXफल पर आधा@रत होगा जो (cid:4)क कर योYय ह ैऔर छूट +ाR ह ै।
3. यह आदशे 1 अ+लै , 2019 से +भावी होगा ।
[फा. स.ं 354/32/2019-टीआरयू]
+मोद कुमार, उप सिचव¹Hkkx IIµ[k.M 3(ii)º Hkkjr dk jkti=k % vlk/kj.k 3
ORDER
New Delhi, the 29th March, 2019
No. 03/2019-Union Territory Tax
THE UNION TERRITORY GOODS AND SERVICES TAX (REMOVAL OF DIFFICULTIES) ORDER, 2019
S.O. 1493(E).—Whereas, clause (v) of section 21 of the Union Territory Goods and Services Tax
Act, 2017 (14 of 2017) read with sub-section (2) of section 17 of the Central Goods and Services Tax
Act, 2017 (12 of 2017) (hereafter in this Order referred to as the “said Act” provides that the input tax credit
shall be restricted to so much of input tax as is attributable to the taxable supplies;
And whereas clause (v) of section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of
2017), read with sub-section (3) of section 17 of the said Act provides that the value for the purpose of
sub-section (2) of Section 17 of the said Act shall be such as prescribed by rules;
Now, therefore, in exercise of the powers conferred by section 26 of the Union Territory Goods and
Services Tax Act, 2017 (14 of 2017) the Central Government, on recommendations of the Council, hereby
makes the following Order, namely:—
1. Short title.—This Order may be called the Union Territory Goods and Services Tax (Third Removal
of Difficulties) Order, 2019.
2. For the removal of difficulties, it is hereby clarified that in case of supply of services covered by
clause (b) of paragraph 5 of Schedule II of the said Act, the amount of credit attributable to the
taxable supplies including zero rated supplies and exempt supplies shall be determined on the basis of
the area of the construction of the complex, building, civil structure or a part thereof, which is taxable
and the area which is exempt.
3. This order shall come into force with effect from the 1st of April, 2019.
[F. No. 354/32/2019-TRU]
PRAMOD KUMAR, Dy. Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.