Co-operative Seminar – 3 for the price of 1 – ICAI

Dear Co-operative Members,

The Committee for Co-operatives and NPO Sectors of the Institute of Chartered Accountants of India (ICAI) jointly with Maharashtra State Co-operative Housing Federation Ltd is organizing a National Conference on Housing Co-operatives on the 18th and 19th of July 2014 at ICAI Tower, BKC-Bandra, Mumbai.

This conference will be primarily focused on the regulatory, functional/ operational, financial, taxation, auditing and governance related aspects among others of housing co-operatives and will also include experts’ and stakeholders representatives’ panel discussions on the related topics and issues.

We are keen that you register your name through Co-operative Housing society, so that against one registration fees of Rs.1,500/- (Rs. One Thousand five hundred only) three members can attend and take the benefit of the conference. We also request you to circulate the attached program to all your know circles, members so, that they will be able to participate and interact with the experts in the field and enrich your knowledge, professional opportunities and clarity in the area of their interest.

We also request you to send us the your valuable inputs on the topics or any other issues related to Housing co-operatives you want to cover in this conference by  eminent speaker/ faculty / panel members. We request you to consider our request and do the needful at the earliest to get registration for this conference by your friends and other co-operative leaders, stakeholders to this conference at the earliest.

The registration can be done online and the details of online registration is given in the attached schedule of program for two days.  Some of the guest and speakers are subject to confirmation and the organizers reserves the right to reschedule the program as may be deem fit in the interest of making the program an interesting to all the participants.

We look forward to receiving your positive and enthusiastic response.

Warm regards,

CA Rajkumar S. Adukia
Chairman, Committee for Co-operative & NPO Sectors

With Best Regards

CA. Ramesh S. Prabhu

Co-convener, Housing Task Force of Committee for Co-operative and NPO sectors of ICAI , New Delhi

A2-302, Laram Center, S.V. Road, Opp: Railway Station

Andheri(W), Mumbai- 400 058

Tel: 9820106766022- 42551414

 

National Conference on HOUSING CO-OPERATIVES CPE

12 hours

Days & Dates Friday 18th July, 2014 & Saturday, 19th July, 2014.
Venue ICAI Tower, Plot no C-40, G Block, Opp. MCA Ground, Next to Standard Chartered Bank, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051
Time 10.00 a.m. to 05.30 p.m.

(Registration 09.00 a.m. to 10.00 a.m.)

Fees Registration Details:
• Registration Fees : Rs1500/- per participant

(inclusive of course material, breakfast & lunch)

Non residential and the participants have to make their own stay arrangement.
Mode of Registration & Payment:
• Offline Registration & Payment DD/Pay order/Cheque should be drawn in favour of ‘WIRC of ICAI’ payable at Mumbai and sent to ICAI Tower, Plot no C-40, G Block,Opp MCA Ground, Next to Standard Chartered Bank, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051. Please mention your name, Membership number, Registration Number and contact details at the back of the cheque /demand draft.

• Online Registration & Payment : For online registration please visit:

Member : http://www.icai.org/ccm.html?progid=572
Non Member : http://www.icai.org/ccm.html?progid=573

Programme Chairman CA. Rajkumar S. Adukia,CCM
Chairman,Committee for Co- Operatives and NPO Sectors
Email id- rajkumarradukia@caaa.in
Programme Director CA. Nilesh Vikamsey
Topics
Friday 18th July, 2014
Day 1 Session Subject Matter
Inauguration Honorable Shri. Harshwardhan Shahajirao Patil

Minister of Co-operation and Parliamentary Affairs, Govt. of Maharashtra

Guest of Honour Shri. Dinesh Olkar

Commissioner and Registrar of Co-operative Societies

Session I Overview of Laws on Co-operative Societies with special reference to Housing Societies

Speaker:

  1. Rajkumar S. Adukia,

Central Council Member, ICAI

Session II
  • Formation of Co-operative Housing Societies
  • Drafting of Bye-Laws of Co-operative Housing Societies
  • Title of Property
  • Conveyance and Deemed Conveyance
  • Stamp Duty Planning & Registration

Speakers:

CA. Ramesh Prabhu

CA. Vimal Punamiya

Session III
  • Slum Rehabilitation Provisions
  • Slum Rehabilitation Authority

Speakers:

Shri. Nirmal Deshmukh, CEO, SRA

Shri. Milind Borikar, Joint Registrar, SRA

Session IV
  • Construction Management
  • Development Control Regulations and similar provisions of different cities
Saturday, 19th July, 2014
Day 2 Session Subject Matter
Special Address Honorable Shri. Sachin Ahir,

Maharashtra Minister of State for Housing

Session V Redevelopment:

  • Benefits of redevelopment
  • How to go for Redevelopment
  • Project Management Consultants

Speakers:

Adv. Ameet V. Mehta

Arch. Arvind Nandapurkar

Session VI
  • Accounting for Housing Co-operatives
  • Auditing for Housing Co-operatives

Speakers:

CA. Abhay Arolkar

CA. Dhondirao A. Chougule

Divisional Joint Registrar (Audit) – Kolhapur Division

Session VII Taxation of:

  • Flat Owners
  • Land owners
  • Housing Societies
  • Developers
  • Other parties involved in Housing

Speakers:

CA. Manish Gadia

CA. Prem Chhatpar

Session VIII Funding arrangements in Housing Sector

Speakers:

CA. Sanjay Shukla

MD of Cent Home Finance Ltd.

Representatives of NHB and Housing Finance Companies

Transmission of a flat in housing society or CHS?

More often than not, due to the sheer complicity and technicalities of our legal system, we find ourselves trampled by a load of complicated questions and even cheating and deception. One such area of concern is ‘transmission of flats‘. Here, we have the procedure for the same simplified for you.

Transmission of flats happens in the following two ways:
  1. When the flat owner has made a nomination before death.
  2. When the flat owner has not made any nomination before death.

Click Here for the full detailed write-up from MoneyLife by Shirish S Shanbhag, an MSc and a retired professor with over 32 years of experience, helps draft legal documentation related to co-operative societies, RTI and several other areas.) 

HOUSING SOCIETY MATTERS – VOLUME – II – ISSUE NO. 10

We are extremely thankful to Ms.Heena Sampat for the complimentary copy of :

(23) HOUSING SOCIETY MATTERS – VOLUME – II – ISSUE NO. 10 – 01.07.2014 TO 15.07.2014

  • DEVELOPMENT RIGHTS – WHO ARE ENTITLE – SOCIETIES OR MEMBERS ?
  • Additional Area expected at Redevelopment
  • Corpus Money expected at Redevelopment
  • Rent for Temporary Alternative Accommodation including Deposits, if any
  • Hardship Allowance/ Compensation for Inconvenience.
  • Letters to : 1. The Hon’ble Minister for Co-operation, Govt. of Maharashtra, 2. The Principal Secretary – Co-operation, Govt. of Maharashtra, 3. The Commissioner for Co-operation & Registrar of Co-operative Societies, Pune, in respect of :
    • REDEVELOPMENT RELATED GUIDELINES NOT FOLLOWED BY PRACTICALLY EVERY DY. REGISTRAR.
    • DIRECTIONS BEING GIVEN BY DY./ASSTT, REGISTRARS TO COMPLY WITH ORDERS WITHOUT WAITING FOR THE STIPULATED APPEAL PERIOD DEPRIVING PARTIES THE RIGHT TO APPEAL.
    • REGISTERS TO BE MAINTAINED BY THE CO OPERATIVE DEPARTMENT.
    • ORDERS BEING PASSED BY OFFICERS OF THE CO-OPERATIVE DEPARTMENT ADMITTING PERSONS AS MEMBERS SIMULTANEOUSLY U/S. 22(2) AND/OR 23 INSPITE OF THE PURCHASER/OCCUPANT NOT PAYING THE DUES OF THE SOCIETY.
    • NEED FOR STANDING ORDERS & CLARITY ON VARIOUS MATTERS RELATED TO CO-OPERATIVE HOUSING SOCIETIES.
    • AMENDMENTS REQUIRED IN MCS ACT.
    • UPLOADING DAILY ORDERS PASSED BY OFFICERS ON INTERNET.
    • UPLOADING OF DAILY HEARING BOARD ON INTERNET.
    • MANDATORY CHECKING OF APPROX. 25% ORDERS OF JR. OFFICERS TO INTRODUCE INBUILT SYSTEM OF ACCOUNTABILITY.
    • PASSING OF BIFURCATION ORDERS AT THE DROP OF A HAT WITHOUT UNDERSTANDING THE IMPLICATIONS OF SUCH ORDERS.
    • AMENDMENTS REQUIRED IN MAHARASHTRA CO OPERATIVE SOCIETIES ACT.
    • INTRODUCTION OF SYSTEM OF WRITTEN ARGUMENTS BEFORE TAKING UP FINAL HEARING MATTERS.
    • APPOINTMENT OF ADMINISTRATORS / AUTHORISED OFFICERS.
    • MODIFICATION OF AUDIT FORM NOS. 1 & 28 SO THAT QUALITY TIME CAN BE SPENT BY DEPARTMENT STAFF AS WELL AS INCREASE THE COMFORT LEVEL OF SOCIETIES.

Click Here to read the entire interesting issue

Service Tax on Co-operative Society Members

SERVICE TAX ON MEMBER’S CONTRIBUTIONS

Circular No. 175/01/2014-ST dated 10-Jan-2014, issued by Under-Secretary to Government of India, Ministry of Finance, contains following points:

(Note: RWA = Resident Welfare Association)

  1. In a residential complex, monthly contribution collected from members is used by the RWA for the purpose of making payments to the third parties in respect of commonly used services or goods [Example: for providing security service for the residential complex, maintenance or upkeep of common area and common facilities like lift, water pump, health and fitness centre, swimming pool, payment of electricity Bill for the common area and lift, etc.]
  2. Exemption is provided specifically with reference to service provided by an unincorporated body or a non-profit entity registered under any law for the time being in force such as RWAs, to its own members. However, a monetary ceiling has been prescribed for this exemption, calculated in the form of five thousand rupees per month per member contribution to the RWA, for sourcing of goods or services from third person for the common use of its members.
  3. If per month per member contribution of any or some members of a RWA exceeds five thousand rupees, the entire contribution of such members whose per month contribution exceeds five thousand rupees would be ineligible for the exemption under the said notification. Service tax would then be leviable on the aggregate amount of monthly contribution of such members.
  4. This tax has been in effect since 2005. At that time, exemption ceiling was Rs. 3000.

This circular mentions only RWAs i.e. our CO-OPERATIVE HOUSING SOCIETIES. However the same principle is also applied to club memberships, membership fees of associations and chambers of commerce, etc.

Such service tax collection has been struck down by service tax tribunals and high courts under the principle that where every member is a share-holder and every share-holder is a member, there is no provision of service from one entity to another.

Most of us are un-able or un-willing to fight it out in court. However, the least we can do is to ask for a refund after paying the tax.

M. B. Damania.

2014 Jul.10.

Service Tax applicable on Maintenance Charges collected by Society ?

Please find below the circular no. 175/01/14-ST  dated 10.01.2014.  Service tax is not applicable on maintenance charge collected by society [limit Rs5000 per month]. Emphasis added.

Dr. P.K.Banerjee
______________________________________________________________________________

 Circular No.175 /01 /2014 – ST

 

F. No.354/237/2013-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise& Customs

Tax Research Unit

North Block, New Delhi

10th January, 2014

To

Chief Commissioners of Central Excise and Service Tax (All),     Director General (Service Tax), Director General (CentralExcise Intelligence), Director General (Audit), Commissioners of Service Tax (All), Commissioners of Central Excise and Service Tax (All).

 

Madam/Sir,

 

Subject:  Levy of service tax on services provided by a Resident Welfare Association (RWA) to its own members – regarding.

 

Service tax on ‘club or association service’ which covers Resident Welfare Association (RWA) was introduced with effect from 16.06.2005, vide section 65(105)(zzze) read with section 65(25a)[(25a) was later renumbered as (25aa)]. Under the positive list approach which was followed prior to 1st July 2012, exemption was available under notification No. 8/2007-ST dated 01.03.2007, if the total consideration received from an individual member by the RWA for the services does not exceed three thousand rupees per month. This notification was rescinded vide notification No. 34/2012-ST dated 20th June 2012, with effect from 1st July, 2012.

2.         Under the negative list approach, with effect from 1stJuly, 2012, notification No.25/2012-ST [sl.no.28 (c)] provides for exemption to service by a RWA to its own members by way of reimbursement of charges or share of contribution up to five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members.

Certain doubts have been raised regarding the scope of the present exemption extended to RWAs under the negative list approach. These doubts have been examined and clarifications are given below:

Sl. No. Doubt Clarification
(i) In a residential complex, monthly contribution collected from members is used by the RWA for the purpose of making payments to the third parties, in respect of commonly used services or goods [Example: for providing security service for the residential complex, maintenance or upkeep of common area and common facilities like lift, water sump, health and fitness centre, swimming pool, payment of electricity Bill for the common area and lift, etc.]. Is service tax leviable?

 

(ii) If the contribution of a member/s of a RWA exceeds five thousand rupees per month, how should the service tax liability becalculated?

Exemption at Sl. No. 28 (c) in notification No. 25/2012-ST is provided specifically with reference to service provided by an unincorporated body ora non–profit entity registered under any law for the time being in force such as RWAs, to its own members.

 

However, a monetary ceiling has been prescribed for this exemption, calculated in the form of five thousand rupees per month per member contribution to the RWA, for sourcing of goods or services from third person for the common use of its members.

 

If per month per member contribution of any or some members of a RWA exceeds five thousand rupees, the entire contribution of such members whose per month contribution exceeds five thousand rupees would be ineligible for the exemption under the said notification. Service tax would then be leviable on the aggregate amount of monthly contribution of such members.

(i) Is threshold exemption under notification No. 33/2012-ST available to RWA?

 

(ii) Does ‘aggregate value’ for the pusrpose of threshold exemption, include the value of exempt service?

 

Threshold exemption available under notification No. 33/2012-ST is applicable to a RWA, subject to conditions prescribed in the notification. Under this notification, taxable services of aggregate value not exceeding ten lakh rupees in any financial year is exempted from service tax. As per the definition of ‘aggregate value’ provided in Explanation B of the notification, aggregate value does not include the value of services which are exempt from service tax.
If a RWA provides certain services such as payment of electricity or water bill issued by third person, in the name of its members, acting as a ‘pure agent’ of its members, is exclusion from value of taxable service available for the purposes of exemptions provided in Notification 33/2012-ST or 25/2012-ST ? In Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006, it is provided that expenditure or costs incurred by a service provider as a pure agent of the recipient of service shall be excluded from the value of taxable service, subject to the conditions specified in the Rule.

For illustration, where the payment for an electricity bill raised by an electricity transmission or distribution utility in the name of the owner of an apartment in respect of electricity consumed thereon, is collected and paid by the RWA to the utility, without charging any commission or a consideration by any other name, the RWA is acting as a pure agent and hence exclusion from the value of taxable service would be available. However, in the case of electricity bills issued in the name of RWA, in respect of electricity consumed for common use of lifts, motor pumps for water supply, lights in common area, etc., since there is no agent involved in these transactions, the exclusion from the value of taxable service would not be available.

Is CENVAT credit available to RWA for payment of service tax? RWA may avail cenvat credit and use the same for payment of service tax, in accordance with the Cenvat Credit Rules.

 

3.         Trade Notice/ Public Notice to be issued. Hindi version to follow.

 

[Raj Kumar Digvijay]
Under Secretary to the Government of India

 

Redevelopment Greed is making housing societies neglect maintenance & repair

Red alert! Redevelopment Greed is making housing societies neglect maintenance & repair

2 July 2014, Mumbai:  The return of monsoons is good news to everybody, but as always, there will be severe casualties in aging and ill-maintained buildings in every metro, including Mumbai. One may safely predict that at least five buildings will collapse in Mumbai alone, especially on the days with the heaviest rains, simply because of the additional weight of several thousand kilograms of absorbed rainwater that the dilapidated structures will have to bear. This weight is unevenly distributed on a weakened RCC structure, causing structural collapse.

 The following problems are perennial and systemic:

1)      The buildings of Mumbai and every other metro are aging. Every passing seasonal cycle of summer, monsoon and winter are causing further deterioration in the cement and steel of RCC structures by rusting and cracking. Therefore, every passing year, the load-bearing capacity of the RCC of every building deteriorates by small percentage like 0.2 to 1%.

2)      Older buildings deteriorate at a faster rate e.g. 1% per year. If they are well-maintained, this rate of deterioration may be reduced to 0.5%, effectively increasing its life span by many years.

3)      Unfortunately, many buildings have been made into “sick” buildings over the past decade by short-sighted cooperative societies neglecting them, in the lust for getting them declared as “dilapidated”, so that they go into commercial redevelopment. The load bearing capacity of the RCC of such buildings deteriorates by 5-10%. These buildings are like ticking time-bombs, waiting to collapse.

4)      In the monsoon, the rain-water seeps into the walls and ceilings of such neglected structures, increasing their weight by several thousand kilograms. This additional weight is distributed unevenly on the RCC frame, making it extremely vulnerable to sudden structural failure. These buildings cannot continue to be occupied. Ignoring them is a criminal negligence on the part of the government and municipal corporations.

5)      There is no civic body which has the necessary mandate for vacating and demolishing demolish hundreds or thousands of such critical buildings before they collapse due to “natural causes” in the coming monsoons. If such a body is not created, there is simply no alternative to redevelopment – whether voluntary or forced. These must be demolished and rebuilt under supervision of an empowered government body. Unfortunately, such an empowered body does not exist!

6)      A timetable for performing emergency repairs on thousands of other buildings is a must. These are not yet critical, they will inevitably become critical and dangerous if neglected for another 3-4 years. This must also be done under supervision of an empowered government body.

7)      Unfortunately, it is financially unviable for all the thousands of buildings of Mumbai to be redeveloped and rebuilt simultaneously. Therefore, a priority list will have to be made by the government agency after scrutiny.

8)      Many MLAs, MPs and corporators are builders, or have invested in building industry. These persons are aware of the deterioration, but they are using their knowledge for their own private benefit. The knowledge of these persons must be harnessed for public good. Unfortunately, such politicians are actively preventing any proactive planning from happening, for fear of harming their own interests!

9)      On a conservative estimate, more than 80,000 flats are lying vacant all over Mumbai. They belong to builders, estate agents and investors. Such flats should be requisitioned by the government and municipal corporations, and used for immediately resettling the people living in dangerous buildings.

10)   For all the above-mentioned work, which is urgent, new laws needs to be passed,and a new government agency is required to be constituted under the urban development ministry.

 

Problems Caused by Redevelopment Greed:

Since redevelopment started in 1991 about two decades ago, and builders could augment the FSI (Floor Space Index) of the land by purchasing TDR (Transfer of Development Rights), cooperative housing societies started neglecting their structures. Seduced by builders who promise larger houses and new buildings, building societies have been keen to steamroll opposition to their redevelopment proposals by individual members by deliberately allowing their building to deteriorate, so that structural auditors can declare them as “dilapidated”.

Earlier, it was a nightmare for a society to be told that its building was structurally unsound, and managing committee members and general body members alike were anxious to avoid it by regular re-plastering, painting and repairing. But in the last two decades, a report from structural engineers saying that the building is “dilapidated” or is in need of “major repairs” has been the dream-come-true of every managing committee, because it legitimizes their quest for redevelopment.

Redevelopment is a gravy-train by which everybody gets to make money, and especially civic authorities who give various building permissions, cooperative department officials, and the managing committees of societies. Many residential buildings aged around 30 and above would have been in a relatively better state, were it not for this lust for redevelopment. Despite a fair number of stalled redevelopment projects, and the opposition by cautious members in every society, the greed-is-good ethos of the majority of members in almost every society ensures that this gravy train is gaining momentum.

Brief overview of Mumbai’s redevelopment over the last two decades: http://tinyurl.com/History-Mumbai-Redevelopment

Over 10 percent of Mumbai’s 30,000-odd society buildings are currently suffering from varying degrees of redevelopment-driven neglect by their managing committees, which collect money for their Repair Fund and Sinking Fund every month, but never spend for repairs and maintenance, Hoping to reap windfall gains from redevelopment, the managing committees favour a dilapidated appearance, which sends a come-hither signal to builders.

Sadly, every such society will not enter into the process of redevelopment swiftly; the overwhelming majority of old buildings will have to wait for many years before their redevelopment happens. Hence, residents are condemned by their greedy and negligent managing committees to live for long in buildings with fast-deteriorating RCC columns, beams and slabs.

In every society, one or two people are fighting a losing battle against this commercially-driven madness. They are seeking better maintenance of their societies.  Most often, their voices are raised only at meetings, and this makes them pariahs. Far from recognizing that their words are in the common interest, a majority of their neighbours consider them mad, and shun them. Their managing committees are quick to paint them as anti-social villains opposed to the prosperity that will be brought about by redevelopment.

One such person is Rohit D’Souza (9819199863rohitpdsouza@gmail.com), a young sportsman of Mulund. Due to the constant leakage and seepage from the rooftop tank, and the consequent rusting and deterioration of the building structure, Rohit and his neighbours fear for their lives, and have written many letters to their building secretary and to to MCGM’s Ward Officer for T-Ward.  But their letters may as well have been written by residents of thousands of other residents of Mumbai, who are in the same boat: http://tinyurl.com/Please-repair-tank

 

Numerous societies are in exactly the same boat. Improper structural maintenance by societies due to greed, cost cutting, ignorance, unavailability of skilled labourers, disputes between members etc. is endangering the lives of thousands of families living in Mumbai. The steel in the RCC columns, beams and slabs has rusted and become exposed in many buildings, and Rohit’s building is only a sample of what thousands of buildings are currently looking like. Like Rohit, lakhs of people in Mumbai region are saying, “We are not opposed to redevelopment per se, but we are definitely opposed to the deliberate neglect of our buildings, which is a growing threat to our lives.”

But are the government and municipal authorities listening? And more importantly, are the managing committee members listening?

Or will they, like the Municipal Corporations of Mumbai, Mumbra, Thane etc. wake up only after the building crashes down?

Issued in Public Interest by

Krish

9821588114

Building.RTI.Union@gmail.com

PS: After reading this, if residents of societies wish to gently start reminding their societies to maintain the building, they may use this word file as a format: http://tinyurl.com/sample-letter-to-society

 

No election at Co-operative Housing Societies before 31.12.2014

Please refer:

MAHARASHTRA ACT No.XVI of 2013 (First Published, after having received the assent of the Governor, in the “Maharashtra Government Gazette”, on the 13th August 2013):

Quote: State Co-operative Election Authority. “73CB (15): Notwithstanding anything contained in this Act, the rules or the by-laws of any co-operative society, the election to the committee and consequent election of the office-bearers which is due on the date of commencement of the Maharashtra Co-operative Societies (Amendment) Act, 2013, or may become due after such date, until 31st March 2013 shall be held before the 31st December 2013.Unquote.

Please refer again:

MAHARASHTRA ACT No. XXXI OF 2013 (First Published, after having received the assent of the Governor, in the “Maharashtra Government Gazette”, on the 20th December 2013).
An Act to further amend the Maharashtra Co-operative Societies’ Act, 1960

Quote:
 WHEREAS it is expedient further to amend the Maharashtra Co-operative Societies Act, 1960 for the purposes herein after appearing ; it is hereby enacted in the Sixty fourth year of Republic Of India as follows:-

1. This Act may be called the Maharashtra Co-operative Societies’ (second Amendment Act, 2013).Amendment of Section 73CB of Mah.XXIV of 1961.

2. In Section 73CB of Maharashtra Co-operative Societies’ Act, 1960 in sub Sub Section (15), for the words, figures and letters”before the 31st December, 2013″ the words, figures and letters “before the 31st December 2014” shall be substituted. Unquote

Hope the matter quite clear.

J.B.Patel – Jeby

Housing Society Matters – 16-30 November 2013

We are extremely thankful to the Editor Heena Vinod Sampat for sending us a copy of extremely useful and informative “HOUSING SOCIETY MATTERS” which I am forwarding for your benefit. I am sure you will appreciate the gesture.

Some major highlights :

  • Common problems of Co-operative Societies and solutions
  • Useful Email ids for Complainants
  • List of Documents that may be demanded by Society from Builder
  • Specimen prayers in Consumer Court
  • and much more

Click Here for the full issue

J.B.Patel (Jeby)
RTI & Housing Societies’ Activist
Mobile:9820538570
FIGHT FOR YOUR RIGHT !