Monday, 3 July 2017
Monday, 5 June 2017
Guide - Residential repair rules
As per section 342 of BMC Act, 1988 (amended till date), the
following “tenantable repairs”, can be carried out without obtaining permission from the ‘Building
and Factory’ department of local BMC:
- Plastering, painting,
pointing of your flat
- Providing guniting to
the structural members or walls
- Changing floor tiles
- Repairing WC, bath or
washing places
- Repairing or replacing
drainage pipes, taps, manholes and other fittings
- Repairing or replacing
sanitary, water plumbing or electrical fittings
- Replacing the roof with
the same material
- Replacement of existing
water-proofing material of the terrace.
The only
pre-conditions to the renovation work to be done at residences are:
- The original tenantable
structure (whether rental or ownership) must be legal, i.e. it is based on
the original BMC-approved Building plan.
- Though no BMC permission
for the above is required, it is advisable to do so under strict
supervision of a registered Architect and/ or Structural Engineer
The “tenantable repairs” however shall NOT include the following:
- Replacing or removal of
any structure members of load bearing walls
- Change in horizontal or
vertical existing dimensions of the structure
- Lowering of plinth,
foundations or floors
- Addition or extension of
mezzanine floor or loft
- Flattening of roof or
repairing roof with different material
- No merger of tenancies
by removal or opening of any walls in between two or more tenancies.
- Changing location of
bathroom/ WC/ kitchen sink, in a way that can cause leakage to residents
below.
- Increasing the internal
height of the structure
BMC notices
Notice issued
by BMC under section 354 is a STOP Work Notice, if it feels ongoing work is
unlawful. If there is unauthorised construction, then BMC can issue a
Show-Cause Notice under section 351. This is NOT a Stop Work notice – it is
issued when work is completed and persons are utilizing the said premises. If
the officer is not satisified with the documents produced, then he has
to give them an opportunity to revert the property back to the original
legal status, after which BMC can inititiate demolition under section 488. The
party can go to the civil court for a stay. Notice under section 381 is issued
by BMC if there is nuisance to other members due to some work done by the
resident.
For any
construction to be legalized, there must be documentary proof (electric bill or
property assessment etc.), that the structure existed prior to 1962.
Before starting
renovation work on your property, if you are in doubt, it may be safe to take
‘dated’ pictures of the property. However, if you submit a letter to the
local BMC office, attaching a copy of the Architect’s proposed plan, you
may be requested to forward the same to Building Proposal department at
Byculla, for written approval.
Debris
For debris
lying on the footpaths or roadside or even inside your building compound, you
may be liable to be fined. Since agents are always on the lookout to harrass
citizens, collect the debris in the house and try to remove it on a
Sunday. Debris has to be removed immediately by a contractor, who is
authorized by the BMC to dump the debris in an approved BMC plot.
Under section
375A of BMC Act, Commissioner can give notice to owner of premises for
removal of debris from their premises.
Safety Grills
Newer buildings
come with the permission to install grills. For the older buildings, grills can
be “legalized” by writing to the BMC (Building & Factory department) and
attaching the following documents:
- Landlord NOC
or Society NOC under section 47 and 65 of model bye-laws
- Original floor plan of
the property (flat)
- Approximately Rs 2,000
fee (exact amount depends on the area of window covered)
Lofts
Lofts are governed by section 5 of Table 19 of the DC Rules,
1991 AND Mezzanine floor by Section 6 of Table 19 of the DC Rules, 1991.
Common passages
Structures
built outside the flat, are not allowed (as per DC rules 1991 – Section
44(4)(f). Also corridor or exit or passage must be kept free of obstructions as
per section 43(2)(f) for fire safety. Its minimum width is as specified under
Table 20 of the DC rules.
For Tenanted
properties too, as per section 33 of MRCA (Maharashtra Rent Control Act), the
right to possession of a flat also includes the right to enter and exit the
property without any obstruction (in the passage and beyond too).
Other relevant rules under co-operative housing society Model
Bye-laws:
- Section 139 and 7(d),
the managing committe has the right to collect a deposit for renovation,
because there may be damage to the society premises during renovation and
society has the right to recover that amount from the member (even if the
damage occurs inside the member’s house – for eg to the structure).
- Section 50 under New
Model Bye-laws says that no member must cause nuisance or inconvenience to
other members during their renovation work. And committee has powers to
stop such a nuisance u/s 50(b)
- Section 168 takes into
consideration the convenience of members, allowing usage of lifts to
be regulated by the managing committee.
- Member has to make an
application for usage of terrace u/s 65(a)(ix) of new model
bye-laws. The committee can decide u/s 171 whether to grant permission or
not, for temporary usage – and can also take a payment for the same.
The above is meant to be used as a guide, not as a replacement
for legal opinion. For more information, please feel free to contact the local
BMC office.
Thursday, 25 May 2017
GST on CO OPERATIVE HOUSING SOCIETIES
GST Insight and applicability of GST on Coop HSG Societies-
Why Maharashtra Housing Society is covered under GST
GST is applicable to the dealer-person who is rendering the service or supplying the goods in its regular course of business activity.
Person has been defined under 2(84) as follow:-
“person” includes— (a) an individual; (b) a Hindu Undivided Family; (c) a company; (d) a firm; (e) a Limited Liability Partnership; (f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India; (g) any corporation established by or under any Central Act, State Act or Provincial Act or a Government company as defined in clause (45) of section 2 of the Companies Act, 2013; (h) anybody corporate incorporated by or under the laws of a country outside India; (i) a co-operative society registered under any law relating to co-operative societies; j) a local authority; (k) Central Government or a State Government; (l) society as defined under the Societies Registration Act, 1860; (m) trust; and (n) every artificial juridical person, not falling within any of the above.
From this it can be noted that under clause (i) a co-operative housing society will be covered.
Can the activities of housing Societies be considered as “Business Activity”?
The term business has been defined under Section 2(17) as follow:- “business” includes–– (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) services provided by a race club by way of totalisator or a license to book maker in such club ; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;
The above clause (e) specifically covered a Society, thus the housing society will be considered as carrying out activities in furtherance of business and will be liable for Registration under GST.
REVERSE CHARGES
The “reverse charges” has been define u/s 2(98) as “reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or subsection (4) of section 5 of the Integrated Goods and Services Tax Act.
Thus, under the following cases the Recipient must pay the required GST
1) Any transaction notified by the Government, as on date nothing has been notified but likely it may be for a) Transport payment b) Lawyer Professional Fees c) Security Payment d) Payment where people are providing labour, etc.
2) Obtaining goods / services from UNREGISTERED DEALER.
The recipient will have to prepare an Invoice in such circumstances and pay the tax to government and prepare Payment Voucher
ALL persons liable to pay tax under Reverse Charges will have to be registered themselves under the act irrespective of their liabilities on basis of Turnover. In all probabilities, most of even small societies may be coming for registration under this provision of section 24(iii) and (iv)
Summary of above Act and Few Queries-
1) Whether the Maharashtra Housing Society will be covered under GST ?
Answer is YES
2) Whether any exemption is available on basis of turnover?
YES
a) If the Society’s aggregate receipt of turnover is less than ₹ 20,00,000 it will not be liable for Registration and tax collection.
b) If the Society’s aggregate receipt of turnover is more than ₹ 20,00,000 but less than ₹ 50,00,000 and does not desired to claim any tax credit on its expenses paid GST it can go for Composition Scheme under Section 10.
c) If the Society’s aggregate receipt of turnover is more than ₹ 50,00,000 it will be fully covered like any other business entity.
3) Will the Billing format of the Society will have to be changed ?
Yes, the format will have to be changed and it will be changed as format to be notified.
4) Will the method of accounting have to be changed?
Yes, now as the tax paid on the expense side is available under specific scenario, the party-wise details have to be uploaded and the work being done with various type of online / offline programs will undergo a major change to provide for recording detailed expenses in lieu of recording transactions as being done presently, whereby few society are paying collecting and paying taxes inefficiently increasing the cascading effects.
5) Will the Input tax Credit be available on all the expenses incurred by the Society ?
On following expenses where the taxes are paid No Input tax Credit will be available, i.e.
a) Electricity Expenses
b) Stamp Duty
c) Property Tax
6) Will the reverse charge mechanism applicable to the Society?
On certain transaction, it’s expected that reverse charge mechanism will be applicable and accordingly the GST will have to be paid first and then the Credit may be claimed. Details provided in Annexure “D”.
Under GST, all dealers including a Society will have to file 3 returns in a month for each and every transaction on the billing side on 10th of following month and on expenses side on 15th of following month and consolidated return on 20th of following month and an Annual Return has to be filled. Thus in all 37 returns will have to be filled.
Other than these, if they deduct TDS then they will have to also filed GSTR-7 by 10th of the following month.
However, certain societies may fall under quarterly return if they have opted for Composition Scheme by forfeiting all the Credit on expenses and willing to pay tax on receipts. Composition Scheme is not dealt with over here as it requires a separate approach.
7) Will a Separate Audit be required under GST?
Yes, if the turnover exceeds prescribed limit. Thus, in effect there may be minimum 3 audit as follow:
a) Statutory Audit
b) GST Audit
c) Income Tax Audit
8) On what amount GST must be paid?
GST is payable on consideration, which has been defined under section 2(31) of the CGST and state law have been requested to follow and align their laws in line with CGST. Thus, it is assumed at this moment that it will be the same. Consideration includes not only amount receivable for an activity but also monetary consideration for agreeing to refrain from an activity.
However, it’s provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply . That means on deposit there will be no GST, unless supply and / or service is made against that deposit.
Why Maharashtra Housing Society is covered under GST
GST is applicable to the dealer-person who is rendering the service or supplying the goods in its regular course of business activity.
Person has been defined under 2(84) as follow:-
“person” includes— (a) an individual; (b) a Hindu Undivided Family; (c) a company; (d) a firm; (e) a Limited Liability Partnership; (f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India; (g) any corporation established by or under any Central Act, State Act or Provincial Act or a Government company as defined in clause (45) of section 2 of the Companies Act, 2013; (h) anybody corporate incorporated by or under the laws of a country outside India; (i) a co-operative society registered under any law relating to co-operative societies; j) a local authority; (k) Central Government or a State Government; (l) society as defined under the Societies Registration Act, 1860; (m) trust; and (n) every artificial juridical person, not falling within any of the above.
From this it can be noted that under clause (i) a co-operative housing society will be covered.
Can the activities of housing Societies be considered as “Business Activity”?
The term business has been defined under Section 2(17) as follow:- “business” includes–– (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) services provided by a race club by way of totalisator or a license to book maker in such club ; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;
The above clause (e) specifically covered a Society, thus the housing society will be considered as carrying out activities in furtherance of business and will be liable for Registration under GST.
REVERSE CHARGES
The “reverse charges” has been define u/s 2(98) as “reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or subsection (4) of section 5 of the Integrated Goods and Services Tax Act.
Thus, under the following cases the Recipient must pay the required GST
1) Any transaction notified by the Government, as on date nothing has been notified but likely it may be for a) Transport payment b) Lawyer Professional Fees c) Security Payment d) Payment where people are providing labour, etc.
2) Obtaining goods / services from UNREGISTERED DEALER.
The recipient will have to prepare an Invoice in such circumstances and pay the tax to government and prepare Payment Voucher
ALL persons liable to pay tax under Reverse Charges will have to be registered themselves under the act irrespective of their liabilities on basis of Turnover. In all probabilities, most of even small societies may be coming for registration under this provision of section 24(iii) and (iv)
Summary of above Act and Few Queries-
1) Whether the Maharashtra Housing Society will be covered under GST ?
Answer is YES
2) Whether any exemption is available on basis of turnover?
YES
a) If the Society’s aggregate receipt of turnover is less than ₹ 20,00,000 it will not be liable for Registration and tax collection.
b) If the Society’s aggregate receipt of turnover is more than ₹ 20,00,000 but less than ₹ 50,00,000 and does not desired to claim any tax credit on its expenses paid GST it can go for Composition Scheme under Section 10.
c) If the Society’s aggregate receipt of turnover is more than ₹ 50,00,000 it will be fully covered like any other business entity.
3) Will the Billing format of the Society will have to be changed ?
Yes, the format will have to be changed and it will be changed as format to be notified.
4) Will the method of accounting have to be changed?
Yes, now as the tax paid on the expense side is available under specific scenario, the party-wise details have to be uploaded and the work being done with various type of online / offline programs will undergo a major change to provide for recording detailed expenses in lieu of recording transactions as being done presently, whereby few society are paying collecting and paying taxes inefficiently increasing the cascading effects.
5) Will the Input tax Credit be available on all the expenses incurred by the Society ?
On following expenses where the taxes are paid No Input tax Credit will be available, i.e.
a) Electricity Expenses
b) Stamp Duty
c) Property Tax
6) Will the reverse charge mechanism applicable to the Society?
On certain transaction, it’s expected that reverse charge mechanism will be applicable and accordingly the GST will have to be paid first and then the Credit may be claimed. Details provided in Annexure “D”.
Under GST, all dealers including a Society will have to file 3 returns in a month for each and every transaction on the billing side on 10th of following month and on expenses side on 15th of following month and consolidated return on 20th of following month and an Annual Return has to be filled. Thus in all 37 returns will have to be filled.
Other than these, if they deduct TDS then they will have to also filed GSTR-7 by 10th of the following month.
However, certain societies may fall under quarterly return if they have opted for Composition Scheme by forfeiting all the Credit on expenses and willing to pay tax on receipts. Composition Scheme is not dealt with over here as it requires a separate approach.
7) Will a Separate Audit be required under GST?
Yes, if the turnover exceeds prescribed limit. Thus, in effect there may be minimum 3 audit as follow:
a) Statutory Audit
b) GST Audit
c) Income Tax Audit
8) On what amount GST must be paid?
GST is payable on consideration, which has been defined under section 2(31) of the CGST and state law have been requested to follow and align their laws in line with CGST. Thus, it is assumed at this moment that it will be the same. Consideration includes not only amount receivable for an activity but also monetary consideration for agreeing to refrain from an activity.
However, it’s provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply . That means on deposit there will be no GST, unless supply and / or service is made against that deposit.
Monday, 22 May 2017
About GST Registration for Housing Society
Dear all,
From 1st July 2017, housing societies will need to charge 18% GST to its members, if maintenance recovery is more than Rs.5000/- p.m. per member & if total maint recovery by a society exceeds Rs.20 lacs p.a. Accordingly , only those societies who fall in this category (i.e. fulfilling both the conditions) will need to register under GST & charge from July 2017 onwards. Pl consult your society's CA before registering.
From 1st July 2017, housing societies will need to charge 18% GST to its members, if maintenance recovery is more than Rs.5000/- p.m. per member & if total maint recovery by a society exceeds Rs.20 lacs p.a. Accordingly , only those societies who fall in this category (i.e. fulfilling both the conditions) will need to register under GST & charge from July 2017 onwards. Pl consult your society's CA before registering.
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