Important Keywords: Order No. 04/2019 – Central Tax, GST service supply clarification, GST credit calculation, construction services under GST, GST compliance, GST expert Finodha,
Table of Contents
TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 29th March, 2019
THE CENTRAL GOODS AND SERVICES TAX (REMOVAL OF DIFFICULTIES) ORDER, 2019
Order No. 04/2019 – Central Tax: To remove difficulty in case of supply of services covered by clause (b) of paragraph 5 of Schedule II of the CGST Act, 2017
S.O. (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 beseeches 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:-
- Short title. –This Order may be called the Central Goods and Services Tax (Fourth Removal of Difficulties) Order, 2019.
- 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.
- This Order shall come into force with effect from the 1st day of April, 2019.
[F. No. 354/32/2019-TRU]
(Pramod Kumar)
Deputy Secretary to the Government of India
Frequently Asked Questions (📚 FAQs on Order No. 04/2019 – Central Tax)
📌 Q1: What is Order No. 04/2019 – Central Tax?
Answer:
Order No. 04/2019 – Central Tax clarifies how to determine input tax credit for services covered by clause (b) of paragraph 5 of Schedule II of the CGST Act — primarily relating to construction and real estate services.
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🏗️ Q2: What does clause (b) of paragraph 5 of Schedule II cover?
Answer:
Clause (b) of paragraph 5 of Schedule II treats construction services of buildings, complexes, or parts thereof as supplies of services under GST.
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📐 Q3: How is credit calculated according to Order No. 04/2019 – Central Tax?
Answer:
The input tax credit is calculated based on the proportion of taxable area vs. exempt area in construction projects, including zero-rated and exempt supplies.
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⏳ Q4: From when is Order No. 04/2019 – Central Tax effective?
Answer:
This order came into effect on 1st April 2019 and applies to construction and real estate service suppliers for GST credit calculations.
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📋 Q5: Why was this clarification needed?
Answer:
To remove confusion in the industry about apportioning input tax credits between taxable and exempt areas in construction services and to prevent tax disputes.
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🏢 Q6: Who needs to comply with this order?
Answer:
✔️ Builders and developers.
✔️ Contractors offering construction services.
✔️ Real estate companies involved in residential and commercial projects.
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⚠️ Q7: What if input credit is wrongly calculated?
Answer:
❌ It can lead to tax liabilities, interest, penalties, and audit issues.
✅ Accurate calculation is critical for financial compliance.
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🧾 Q8: How can Finodha help with GST compliance for construction services?
Answer:
Finodha provides:
GST Registration
GST Return Filing
ITC calculation support
Company setup services
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🧩 Q9: How is exempt vs. taxable area determined?
Answer:
The taxable area refers to units sold before completion, and the exempt area refers to units sold after issuance of completion certificates (which are not taxable under GST).
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📢 Q10: How can businesses stay updated on GST-related changes?
Answer:
Follow Finodha’s GST Compliance Hub
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✅ Conclusion
Order No. 04/2019 – Central Tax ensures clarity in calculating input tax credit for construction services.
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Download PDF: Order No. 04/2019 – Central Tax
More Information: https://taxinformation.cbic.gov.in/
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