Seven years after he settled a loan, a borrower is being subjected to numerous calls, notices and even arrest warrant. The only mistake, he committed was not to collect the NOC and account statement from the lender after his settlement
Mumbai-based trader Ramnik Patel (name changed) was happy and relieved when in 2007 he repaid Rs58,000 to ABN AMRO Bank as full and final settlement against his loan outstanding. Seven years down the line, he is receiving calls from recovery agents, and notices from lawyers and warrants from places located thousands of kilometres away from Mumbai. He is not only disturbed, but feels like being mentally tortured just because a small mistake committed by the bank while updating its record.
Interestingly, Patel never received any notice, memo or any warrant for his arrest from anybody until the phone call from Choudhary. Patel, then asked his lawyer to send reply to all concerned, including one lawyer called S Gupta from Delhi and police stations at both Delhi and Mumbai.
Whether all receipts in the hands of the Society/ its individual members shall be net of Vat and Service Tax Responsibility/ liability of Society/Its Members towards the same for services rendered to it by professionals/consultants.
Ans. As Society is not providing any Services to the Developer, the Society is not liable to pay Service Tax or VAT on any of the payments receipt by the Society in the form of reimbursements or Corpus Money or Compensations, etc. If the Society is making any payment of Fees to the Professionals or Contractors, then the Society is liable to pay Service Tax @10.3% to the Professionals and Service Tax or Vat to Contractors on such a payment. The professionals and the Contractors would in turn pay the same to the respective Central Government or State Government as applicable.
Responsibility/ Liability towards stamp duty.
Responsibility/Liability of the Society/its individual members towards Stamp Duty, if any, in transition from surrender of existing premises to the Develop to the occupation and registration of the Redevelopedpremises
Ans. Normally, in the cases of Redevelopment, the Stamp Duty and the Registration Charges on surrender of the existing premises to the Developer for the purpose of Redevelopment would be paid by the Developer. Whereas, when the Individual Members receives the Redeveloped Premises from the Developer, he is liable to pay Stamp Duty and Registration Charges on the same. The Stamp Duty payable would be on the cost of construction of the present area of the Premises and on the market value for the extra area received as per the Ready Reckoner Value published by the Government of Maharashtra every year on 1st January.
Click Here for the original story from Accommodation Times
The service tax department started demanding service tax on member’s contributions in 2005. In 2006, a “clarification” was issued confirming such demand. This is applied to member’s contribution towards expenses of a Cooperative Housing Society, membership subscription of associations, and similar collections.
Maharashtra Chamber of Commerce Industry Agriculture, circulated this demand through its Patrika of January 2008. Subsequently, there was a meeting with the finance secretary; where the finance secretary reminded members that contributions below Rs.3000 were exempted. This satisfied most members and the issue was abandoned.
Litigation in Kolkata and Delhi High Courts confirmed that where every member was a share-holder and every share-holder was a member, there was no provision of service from one entity to another and therefore the application of service tax does not arise. However, this stand has not been accepted by the service tax department. A 2014 circular confirms service tax on contributions to Resident Welfare Associations.
At present, several housing societies are collecting and paying service tax. Associations, clubs and chambers of commerce are also collecting tax on membership subscriptions.
A report in Times of India of 2015 Jan.13 states that two societies have secured a favourable decision in the Mumbai High Court. This is good news not only for the two societies; but also for thousands of other societies and associations. It states:
“The CESTAT decision is the first of its kind for the western zone. The tribunal, based on decisions of other jurisdictions, accepted the principle of mutuality – the society provided services to itself which could not be subject to service tax. However, finality will be reached only once the Supreme Court adjudges on a similar matter pending before it”, said Bakul Mody, chartered accountant, who represented Mittal Towers.
We should be thankful to the two societies and Bakul Mody for taking up the fight. Now let us support them by joining in the fight.
M. B. Damania.
You protect your email, your Bank Account and your phone with your Password – why not your child ?
You can help prevent your child from being abducted by simply doing the following:
1. Create a special password that is shared by you and your child and other trusted people. Under no circumstances should this be shared with anyone else.
2. Make sure your child memorises it.
3. If a stranger approaches your child and tries to convince him or her to come with them, your child should demand the password.
4. If the stranger doesn’t know the password, your child should refuse to go with the stranger and immediately alert a nearby teacher, parent or policeman.
Where a tenant is provided accommodation in the new building on ownership basis, the value of accommodation for the purpose of determining the capital gains shall be the fair market value of the tenancy rights transferred and the cost of acquisition being ‘Nil’, the entire value will be subject to capital gains. However, since the tenancy rights are exchanged for the ownership of a flat, it can be considered as purchase of a residential house by investing the full value of consideration received on surrender of tenancy rights and the tenant would be entitled to claim the reinvestment benefit available under section 54F, subject to compliance of the certain conditions stipulated therein. However, serious difficulties may arise where new premises received in lieu of surrender of tenanted premises are commercial premises, since in such cases the tenant shall not be able to claim the reinvestment benefit available under section 54F as the reinvestment is in a property, other than a residential house. Hence, extreme care should be taken while drafting the agreements so as to ensure that the tenant does not end paying huge capital gains tax on the basis of market value of the tenanted premises upon surrender of tenanted premises for the commercial premises. In such a situation, it is advisable for the tenant to pay nominal consideration to the landlord i.e 120 month’s rent for acquiring ownership rights in the commercial premises.
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Despite directions from RBI, banks refuse to share details of the entity sending money through NEFT
The National Electronic Fund Transfer (NEFT), used by almost everyone to transfer money quickly, can also put the receiver in a difficult position. The main reason is, there are no details available about the remitter or sender and if the amount is large, then the recipient may end up facing Income Tax (I-T) Department queries. Remember what happened with Aishwarya Rai, when in 2006 she received a parcel containing 23,000 euros (around Rs14 lakh at that time) sent by an unknown person from the Netherlands?
Well, with banks hesitating in sharing details of the person or entity who is transferring money via NEFT, it may be you next time. Although the Reserve Bank of India (RBI) has directed banks to furnish appropriate details in passbook or account statement for credits sent and received by the customer through NEFT, all the recipient gets is just a name and amount. “A very generic mention as ‘NEFT’ or ‘NECS’ does not help customers in identifying the source of credits, particularly where multiple credits are afforded to their accounts through these products. The Core Banking Solutions (CBS) of banks should be enabled to capture complete information from the relevant fields in the messages, data files which can be displayed to customers when they access their accounts online or provided to them additionally when they approach the branch counters, help desks, call centres,” the RBI had said.
However, all the recipient gets to know is just a name. There are no details like sender’s PAN number, address and the cause/remark for the money transfer.
Often money launderers are found using bank accounts of low-income individuals for transferring money. In addition, due to the forceful implementation of the Jan Dhan Yojana, we have about 10 crore new bank accounts, out of which 73% do not have a single penny. But consider that tomorrow, if somebody uses these accounts to launder money, then without detailed information about the remitter, how is a poor Kalawati supposed to answer queries from the authorities, including but not limited to I-T department. In the absence of detailed information about the remitter, how will she explain the unaccounted money remitted into her account through NEFT?
Receiving funds from unknown remitters becomes an even bigger issue for non-governmental organisations (NGO), who need to give a receipt as well as I-T exemption certificate. If there is just a name of the remitter, how and where is an NGO, like Moneylife Foundation, supposed to send the receipt?
Another issue with NEFT fund transfer is the delay. According to RBI policy, banks need to afford credits to beneficiary accounts or return transactions (uncredited for whatever reason) to the originating / sponsor bank within the prescribed timeline. It also directed banks to move towards hourly settlement starting from 9am to 7pm on all week days and between 9am to 1pm on Saturdays. Yet, it appears that banks are still using the last part of the work-day or first hour of the next day for NEFT transactions.
Coming back to the Aishwarya Rai episode, the actor was grilled by the Customs official for two-and-a-half hours at the international airport as soon as she landed in Mumbai from Jodhpur. The parcel was allegedly sent by one Avineshwar from the Netherlands marked to the actress. It arrived at the Foreign Post Office in Mumbai during September 2006. Besides the currency, it also contained a top-brand shirt, a pair of binoculars, a DVD player and other electronic items. Following a notice, Aishwarya’s father Krishnaraj Rai, on 15th November met Custom officials to clarify her position. However, the officials insisted to know details from Aishwarya, due to which the actor had to come to Mumbai to clarify her position. She was shooting for the movie ‘Jodha Akbar’ in Jodhpur at that time. After the enquiry, she was give a temporary clean chit by the Customs.
Therefore, it is high time the central bank issues another order mandating banks to share all details of the remitter who is sending money through NEFT or any other payment method to the recipient and actually penalises banks if there are persistent complaints about flouting the RBI’s order.
Courtesy : MoneyLife Foundation