Tag Archives: Co-Operative Housing Society Act

NOC for Society

Understanding Tenant Agreement Housing Society or RWA

Understanding Tenant Agreement Housing Society or RWA

Rental agreements are more or less similar all over the country. It mentions various terms of the agreement, which include:

* Amount of rent to be paid every month

* The amount of safety deposit to be paid to the owner on a return basis

* Period of rental agreement

* Number of people occupying the property

* Type of lease – residential or commercial

* Maintenance issues – who will pay the monthly maintenance bills (in case of a property in a housing society), minor repair work charges, major repair work charges and so on

* Termination of lease rules

The rental agreement in India has been designed well to protect the rights of both the lessor and the lessee. Other clauses may be added in the agreement as per the discussions between the two parties.

Lease Agreements & Deposit

Apart from being drawn up for commercial and residential purposes, there are three types of rental agreements based on the duration of the lease:

* Week to week

* Month to month

* A fixed term, not be less than six months or more than 12 months.

The duration of the notice period prior to the termination of the lease depends on the period of the agreement. Once signed, the landlord needs to give the tenant a duplicate copy of the agreement within 10 days of signing or the tenant may withhold the rent till they receive the copy.

The safety deposit amount to be paid for the duration of the lease may be negotiated. Technically, the safety deposit amount is calculated as the first three months rent which is fully refundable subject after the amount of repair and maintenance deductions the landlord has to make. In practice, however, if the landlord is charging a higher amount of deposit, then the rent amount will be lower and vice versa. The deposit amount has to be refunded within a month or the tenant may charge an interest on the amount that is computed on a daily basis.

The Tenant’s Rights

The Indian rental agreement provides ample security to the tenants. Once the tenancy commences, landlord is not allowed to infringe upon the tenant’s privacy. Although, periodic checks of the property are done to check on the maintenance, the landlord has to give prior information before coming or sending their representatives.

The tenant may also ask for repair work or some other changes to be made to the property if they feel it is absolutely necessary. For instance, a tenant may request installing a grill on the balcony or terrace for child proofing.

The Landlord’s Rights

The landlord holds the right to evict the tenants under strict circumstances if they violate any of the terms of the rental agreement. However, a prior notice of at least three weeks has to be served. Also, if the tenant terminates the lease agreement without prior intimation, the landlord has the right to withhold the full security deposit amount.

Extensions

The rental agreement in India is drawn for a period of 11 months. If both the parties want to extend the lease, a new pact must be drawn a month prior to the expiry of the agreement. Further, the landlord is allowed to impose a 10 per cent raise in rent, which means:

* In accordance with the new rent amount, the security deposit amount may also be raised.

* The duration of the rental agreement may be revised.

The rest of the terms and condition will remain the same if both the parties are satisfied and a few additional clauses may be added as per their discussion.

Legal Issues

If the agreement is not honoured by either party, they are free to take legal recourse. The rental agreement has been made flexible so that neither party may be tied down by pre-defined rules in case of exceptional circumstances. The Indian tenancy laws are strict; however, the legal procedure is long and time consuming.

A part of the problem in the system also arises from the subjectivity in the agreement that does not define the terms and conditions very clearly. When an agreement drawn concisely, the tenant and landlord benefit equally.

Source: The Indian Express (Link)

GST on Housing Society

GST Impact on Housing Society or RWA

GST Impact on Housing Societies or RWA

Co-operative Housing Societies are entities registered under the co-operative laws of the respective States.

According to Section 2(16) of the Maharashtra Co-operative Society Act, 1960, “housing society” means a society, the object of which is to provide its members with open plots for housing, dwelling houses or flats; or if open plots, the dwelling houses or flats are already acquired, to provide its members common amenities and services.

Simply put these are a collective body of persons, who stay in a residential society. As a collective body, they would be supplying certain services to its members, be it collecting statutory dues from its members and remitting to statutory authorities, maintenance of the building, security etc.

Co-operative Housing Societies – whether amenable to levy of GST

Co-operative Housing Societies

A Society is akin to a club, which is composed of its members. So, can a service provided by a Housing Society to its members be treated as service provided by one person to another. The answer is yes. The following extracts of the GST law will make the position clear.

As per Section 9 of CGST Act, 2017, levy of GST is on supply of goods and services. As per Section 7 expression “supply” includes––

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;

The definition of “person” in Section 2(84) (i) of the CGST Act, 2017 specifically includes a co-operative society registered under any law relating to co-operative societies. Thus a registered co-operative society is a person within the meaning of the term in the CGST Act.

The next question which arises is whether the activity of the society can be said to be in the course or furtherance of business. The definition of business as per section 2(17) of the CGST Act, 2017 is as under

“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 licence 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.

Thus, as per section 2(17)(e) of the CGST Act, 2017provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members is deemed to be a business. The activities of the housing society would thus attract the levy of GST and the housing society would be required to register and comply with the GST Law.

Compliance requirements for housing societies under GST

If the turnover of housing society is above 20 lakhs, it needs to take registration under GST in terms of Section 22 of the CGST Act, 2017. However, taking registration does not mean that the housing society has to compulsorily charge GST in the monthly maintenance bills raised on its members. Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017 at sr.no.77 provides for the following exemption to housing societies:

Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution –

(a) as a trade union;

(b) for the provision of carrying out any activity which is exempt from the levy of Goods and service Tax; or

(c) up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex

In view of the provision contained at (c) above, a society may be registered under GST, however if the monthly contribution received from members is less than Rs.5, 000/-(and the amount is for the purpose of sourcing of goods and services from a third person for the common use of its members), no GST is to be charged by the housing society on the monthly bill raised by the society. However, GST would be applicable if the monthly contribution exceeds Rs. 5, 000/-.

Certain statutory dues such as property tax, electricity charges etc. form part of the monthly maintenance bill raised by the society on its members. The question would arise whether such charges should be included while computing the monthly limit of Rs.5000/- in terms of clause (c) of sr.no.77 of notification 12/2017 -Central Tax (Rate) dated 28.06.2017. As per clause (b) of the above exemption, exemption is available to housing societies for provision of carrying out any activity which is exempt from the levy of Goods and Services Tax assuming that a housing society is a non-profit registered entity; and property tax and electricity is exempt from the levy of GST. Thus, charges, collected by the society on account of property tax, electricity charges and other statutory levies would be excluded while calculating the limit of Rs.5,000/-.

Further, the question would then arise that if the monthly bill is say Rs. 6,000/- (and the same is on account of services for common use of its members), will GST be applicable on Rs. 6,000/- or Rs.1, 000/-. In such cases, exemption is available up to an amount of Rs.5, 000/ and GST would be applicable on the amount in excess of Rs.5, 000/-

Source: Tax Guru (Link)

मेंटेनन्सबुडव्यांवर कारवाईचे सोसायट्यांना अधिकार

म. टा. प्रतिनिधी, मुंबई

सहकारी गृहनिर्माण संस्थांतील सदस्य मेंटेनन्सचा खर्च अथवा सोसायटीचे वीज बिल भरीत नसेल तर अशांविरुद्ध संबंधित थकबाकीदारांकडून वसुली करण्याचे अधिकार यापुढे सहकारी गृहनिर्माण संस्थांना मिळणार आहे, अशी माहिती सहकारमंत्री हर्षवर्धन पाटील यांनी दिली. यामुळे मुंबईसह राज्यातील विविध सहकारी गृहनिर्माण संस्थांतील नाठाळ सदस्यांवर सहकारी कायद्यातील कलम १०१नुसार थकबाकी वसुलीचे थेट अधिकार भविष्यात मिळणार असल्याने या संस्थांना दिलासा मिळण्याची शक्यता आहे. Continue reading

TDS payment for Housing Society

TDS for Housing Society

TDS for Housing Society

On registration of housing society, the society gets the status of legal entity.
Under the Income Tax Act 1961, a Cooperative Housing Society is taxable entity.
It is mandatory for any legal entities to file TDS return and Income tax returns
thus it is also obligatory to all housing societies to deduct and file TDS Deducted.

What is Tax Deducted at Source (TDS)?

TDS is a certain percentage of payment which is deducted at the time of payment
made to the party, who can be a contractor or professional. TDS is deducted
after considering the amount of payment is made in his favour by the society.
Such deducted payment is paid to the Government account by the society.
The society deducting the tax is called Deductor and the person or company
whose tax is deducted is called Deductee.

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