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VISAKHA VISIONFOR PRIVATE CIRCULATION ONLY

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DEAR READERS, GREETINGS,

After formation of New Andhra Pradesh the entire system is in a limping stage. In spite of all efforts by Central and State government machinery for several years, the system has not fallen on track. Implementation of GST is still crossing the bridge though a turbulent network. Hence it is time to strengthen the system duly giving priority for the development. Throwing blame on others does not solve issues. Younger generation does not want to wait. They want to grab the opportunity at the earliest .Youth wing( builders community) also not an exception to this .Youth wing has a bigger role to play and they may be able to solve some of the long Problem

pending issues like sand and VLT which we have been

facing for the last several years. Let us hope for the day when youth wing would solve all issues with an innovative approach.

Wish you all a happy DUSSERA & DEEPAWALI.

K. S. CHANDRANBULLETIN EDITOR

EDITORIAL

EDITORIAL BOARD K.S. Chandran, LAYOUT & DESIGN ideafirst, #9-18-1, 1st Floor, Vinayagar Enclave, CBM Compound, Siripuram, Visakhapatnam, Ph: +91 891 2508150., PRINTED AT Sathyam Offset Imprints, Brindavan, #49-28-5, Madhuranagar, Visakhapatnam., PUBLISHED BY CREDAI VISAKHAPATNAM, #9-6-43, Flat No-2, Ground Floor, MVV Bhavan, Sivaji Park Road, Sivaji Palem, Visakhapatnam-530017, Ph: 0891-2739612, Mob: 98488 54448, 99120 54448 Email : [email protected], [email protected]. Website: www.credaivisakhapatnam.org

All the Members are requested to get their address updated with the association in order to ensure timely delivery of magazine also your email ID for speedy communication. If you are not receiving a copy of magazine of CREDAI, VISAKHAPATNAM chapter. please contact @ 9848854448

CREDAI VISAKHAPATNAM (Regd. No : 231of 2010)

K. S. ChandranBulletin Editor

MOST PEOPLE FAIL IN LIFE BECAUSE THEY MAJOR IN MINOR THINGS.

CREDAI VISAKHA VISION | SEP-OCT, 2017 5

At the outset let me express my thanks to all of you for choosing me as the President of CREDAI-VSP, a post which was occupied by luminaries like Sri M.V.V. Satyanarayana, Sri B. Raja Srinivas, Sri K. Ramakrishna Rao and Sri G.V.V.S. Narayana in the past. I promise you to do my very best and stand upto your expectations and justify the faith reposed in me.

As you are aware, there were radical changes in respect of construction sector because, mainly, of Real Estate (Regulatory and Development) Act – 2016 (RERA). This Act aims at ensuring transparency, accountability and financial discipline, protecting

in interests of the customer as well as builder. Since CREDAI-VSP’s main target, as mentioned in the ‘code of conduct’ and ‘bye laws’ of the association, is also the protection of interests of customer, we whole heartedly welcome the Act. Prior to the Act, real estate was an unorganized sector but now it had not only become an organized sector, but had also been given the status of infrastructure in certain schemes. These put together has completely changed scenario of the entire housing construction sector.

I feel we have now done enough to lay the foundation for becoming the Face and Voice of the Construction

Sector in the Smart City Vizag and that we advance from this platform and look in to future with optimism. We gather our thoughts and work closely with the Hon’ble Ministers of Andhra Pradesh and the authorities concerned to device the best policies that would facilitate the business environment and ‘ease of doing business’ to fetch better yields for the generations to come.

The policies are being formulated and Govt. is moved to customize these policies according to the changing environment, ensuring honesty and transparency all around and even for our construction sector.

CREDAI-VSP, through its construction activities and services rendered by its members to society, has become a household name in our province and it has strong representation in the task force for formulating G.O.M.S. No. 119 MA, Building Rules 2017 of A.P., A.P. RERA Rules, G.O.M.S. No. 115 and GST along with local issues. Every day we face new challenges. Stoppage of sand mining, failure in the implementation of new sand policy and steep hike in cement by cartel of cement manufacturers are some examples.

While CREDAI-VSP welcomes the RERA Act since it takes care of the interests of all stake holders in the industry, there are certain provisions in the Act that cause concern to the builders. The status of ongoing projects vis-a-vis the provisions of the Act, the provision of five year ‘defect warranty’ in workmanship and services rendered by concerned govt. departments as also in respect of GST, are some of the issues that bother the building community. CREDAI-National is already seized of these issues and would pursue them with inputs from the state and city chapters.

PRESIDENT’S MESSAGE

Dear Member,Please accept my warm greetings,

CREDAI VISAKHA VISION | SEP-OCT, 20176

CREDAI-VSP plans to organise more workshops on RERA and GST to throw light on various provisions in the Acts and clarify doubts that members might entertain.

Here we don’t require aid but policy support. We are going through testing and challenging times and there is a huge concern over the viability of business. The Govt. and other authorities are looking at the activities of construction sector with magnifying glasses and are trying to tighten the noose around builders neck through the authorities of tax department and provisions of RERA. The issue is how to come out of these testing times at the earliest. A lot of introspection and collaborative effort is required to face this torturous phase. We must drive home the point that, we as developers,are duty bound to follow and adhere to healthy and transparent policies and practices. We need to make concerted efforts to improve our image before our customers. We can pull it off by united efforts and by using our business acumen wisely and transacting business activities fairly and honestly and offering our product at a minimum price. We are also duty bound as members of CREDAI to adhere to and follow our code of conduct, both in words and in spirit.

Youth wing One of the futuristic steps that the CREDAI-VSP has contemplated is setting up and strengthening its Youth Wing which will take up all issues involved in construction activity at the city level. This Youth Wing will set targets for future activities of the CREDAI VSP in construction sector. It has the required national and international exposure in brand building and possesses the wherewithal to take CREDAI VSP’s construction sector to the next level in tune with changing times. I congratulate CREDAI Youth Wing Convener, Mr. K.V.R. Raju (Ramesh) and his dynamic team and wish them all success.

I am an optimist and hence hoping for a better tomorrow.

Property Expo Vizag Property Expo has become a strong brand and the people of Visakhapatnam eagerly look forward to visiting Expo. Three successful Property Expo’s had been conducted by CREDAI-VSP. There is no doubt we are proud of our achievement in this aspect and we should make further efforts to reach new heights of success.

The property exhibition has come of age and its successful conduct had established a unique presence in the minds of all participants – directly or indirectly. They had witnessed these Expos with enthusiasm and they stand as proof of the immense credibility that the Vizag Property Expo’s command among home buyers in Vizag. Through our last three Expos many vizagites have become proud owners of their dream homes. This is because of the offcer of large number choices to them and the easy home finance made available at CREDAI Vizag Property Expos.

We at CREDAI-VSP are leaving no stone unturned to make this event a grand success. So much so that it has been slated to be the grandest property expo that the city has ever seen. More than fifty thousand visitors are expected to visit the ensuing Expo under the leadership of Sri V. Dharmender, Convener, CREDAI Vizag Property Expo 2017-18.

In this back ground, as President of CREDAI-VSP, I assure you that no stone would be left unturned to solve problems of members and I request every member to bring to the notice of the CREDAI-VSP any problem that you might encounter. CREDAI-SP will to its best to solve them.

P. Koteswara Rao President

Chairman G.V.V.S Narayana 9848130272 [email protected]. Koteswara Rao 9908600005 [email protected] B. Srinivasa [email protected]. Govinda Raju 9848521789 [email protected]. Sivaji 9052544555 [email protected] Hon. SecretaryK.S.R.K. Raju (Sai)[email protected] SecretariesChilukuri Srinivas9394218373, [email protected] Shivanand9963322000 [email protected] Srinivas Rao 8897495679 [email protected]. Ashok Kumar 9133188807 [email protected] MembersP Rama Krishna 9848414051 [email protected]. Dharmender 9000387878 [email protected]. Vijay Kumar 9966877999 [email protected]

D. Siva Govindam 9866228662 [email protected]. Bhoja Raju 9849841875 [email protected] K. Nagendra 9666161616 [email protected]. Murali Krishna 9393101811 [email protected] Gopal 9848125925 [email protected] Sharief9848194986 [email protected]. Vamsi Mohan 9390030633 [email protected] Sreenu 9866010679 [email protected] Past ChairmanK Rama krishna [email protected] Wing Co-ordinatorK.V.R. Raju [email protected]

OFFI

CE B

EARE

RS

G.V.V.S. Narayana Chairman

P Koteswara Rao President

B Srinivasa Rao Vice-President

Ch . Govinda Raju Vice - President

N Sivaji Vice President

K.S.R.K. Raju (Sai) Hon. Secretary

Ch Srinivas Joint Secretary

A Shivanand Joint Secretary

N Srinivas Rao Joint Secretary

E Ashok Kumar Treasurer

P Rama Krishna Committee Member

OFFICE BEARERS FOR THE YEAR 2017-18


V Dharmendra Committee Member

M Vijay Kumar Committee Member

V Murali Krishna Committee Member

V Srinu Committee Member

K Rama Krishna Rao Immediate Past Chairman

K Venu Gopal Committee Member

Azizulla Sharief Committee Member

N Vamsi Mohan Committee Member

D Siva Govindam Committee Member

J Bhoja Raju Committee Member

K Nagendra Committee Member


RERA చట�ం “అంద �� డ�“ ��

�శ ఆ��కవ�వస�క� దను�గ ఉండటంల�నూ ��ట�� వ�� వనభ�� క��ంచడంల� ��ణ రంగం

ప�మ�ఖ�త� వ��సూ� ం��.ఇ�� సత�ం . ��ప� వందక� �� చట�� లను ,�బంధనలను

ఇంతక�మ�ను� నుం� ��ణ రం�� సు� �� . పను�ల �� ఇతర రం�ల కంట� ��ణ

రం�� ఎక��వ .��డ� అ��ర అన��ర వ��ల� క�� వ�ంట��.

ఈ ��పథ�ంల� ��ంద� ప�భ�త�o RERA చట�ం ��ం�� . �� ఒకట� ��నుం�� AP RERA �బంధనల�

క�� అమల�ల�� వ��.గత మ�డ� సంవత��ల�� అ��కమం�� త�ల కృ�ల� ��గం� ఈ

చట�� అమల�ల�� నట�� ంద� ప�భ�త�ం ప�కట�ం�ం�� .

అ�� ంద� ప�భ�త� చట�ం, �� ల�బ�� న ఆంధ� ప�� ష� � �బంధనల� �ణo � ప��

తప� �� ల�� ధక బ�ధల� అర�ం �వ�. ��ంద� �ష� � ప�భ��ల చట�� ల� �బంధనల� నూర��తం

ప��ట� / �ల�� బ�ధు�ల� �సు� ��. ఒక �� జ�క�� ణంల� జ�� అ�� ర�కల��లక�

సమ��నం �ప�వల�న�డ� ప��ట�,�ల��. ��ల� ఇతర�ల ప��యం ఏ మ�త�ంల�దు .

ఇ�� RERA చట�ం ��ంశం .

ఈ ��పథ�ంల� ��ణ రంగం ఉన� ��ల� ఒక చర� �� రంభం అ��ం��. చట�ం క��నం� ఉన� ప�డ�

�� ప��ల� న��డ� బ�� బట� కడ�� ? అ�� ఓ ఎద� సం�హం� మ�ందు ��o ��. ప�భ�త�

యం�� ం��క�� య��న అవ�హన ఉన�ట�� కన�ం��డంల�దు .��ంద�ం ఆ��ం�ం��

�బట�� ల� అమల� �య�� .��ణ రంగం �యంత�ణ త��o�� బట�� అదుప�ల�� లన�

ప�భ�త� ల��ం ��గ�ంచ దగ��. ��వర� �దనల�ర�. �� యంత�ణ అదుప� తప�� రణం

��వలం ప��ట� /�ల�� ను బ�ధు�� యడం సబబ� �దు. ఈ బ�ధ�తను ప��ం� ��ర�� ప��ట�

ను క��న ��న చట�ంల� ��ంచడం ��ణ రం�� బల��న పరచడ�� అవ�త�ం�� .

ఎప��, ఎవ�� ప�� ‘చట�ం �� ప� అ�� సుక�ంట� �� త�ం�� ‘ అంట�ం�� లక వర�ం, ప�భ�త�

యం�� ంగం. గత చట�� ల చ��త� అం�� . ఆచరణల� మ�త�ం చట�ం తన ప� ��ను �యల�క �� ం��.

చట�ం అమల�ల�, �� యం��ం� వ�వస� అ�న ప�భ�త� యం�� ంగం �యంత�� క�� త�క�

బదుల��, �� త ��ఖ�� అవలం�సూ� వ��o �� . ఇ�� అ�� రం�ల�� నూ ప�జ�� శ

�స�ృహలక� గ��ం�� .��వల� ‘�� మత�’ గల�డ� �లబ�� డ� .అ��ల��డ� తన వృ��నుం��

తప��క��డ�.


K.V.R. Raju (Ramesh) Co-ordinator

P Subhash Secretary

G. Karthik Convener

G. Brahmaji Committee member

N. Ravi Kumar Treasurer

J. Kumar Nandan Committee member

G. Shiva Committee member

K. Srinivas Committee member

C.K.D. Pratap Committee member

YOUTH WING COMMITTE MEMBERS 2017-18


India is the youngest country among all the countries in the world. It has earned this sobriquet by virtue of the average age of an Indian being less than 30. This is the one advantage that helps the country to achieve rapid progress ahead of many countries including the developed countries of the west.

Headed by Sri K.V.R.Raju (Ramesh) and G.Karthik and with V.Dharmender, as Mentor, this 45 strong CYW has completed two years. This short journey has been eventful and inspiring.

At CREDAI-VSP also there is its youth wing CYW (Credai Youth Wing) which, in a short period of two years, has proved that it could achieve tasks assigned to it, creditably and with aplomb. Whether it is in respect of organising events or absorbing innovative and latest technologies or mobilising funds or taking up CSR (Corporate Social Responsibility) activities, CYW proved its credentials beyond doubt. As immediate past Chairman Sri K. Ramakrishna Rao has observed “CYW which would inherit its legacy has proved its credibility and the future of CREDAI-VSP is safe in its hands”. It was Sri Ramakrishna Rao who had mooted the idea of forming a separate youth wing.

A good number of CYW members had attended to a training programme CYW CREST, organised by CREDAI National in Delhi, to keep abreast of the latest developments and interact with members of CYW at the national level. This followed by successfully organising a ‘Google Workshop’ at CREDAI-VSP’s office

in Visakhapatnam in 2005. The idea was to make young builders aware of internet trends in real sector estate and explain digital marketing of products and reach the end user more efficiently. This had proved to be very useful not only to the members of CYW, but also members of the CREDAI-VSP at large.

CYW has also proved its capacity as fund mobilizer. Rajinikant is a super star in the Tamil Nadu tinsel world. But getting his picture on the first day of release for a fund raising in a city in Andhra Pradesh, is a daunting task. But CYW had achieved this task and got it screened in the Visakhapatnam city in July 2016 with the theme “Kabali For Good Cause”.

Its ability to organise an event had amply been proved during the conduct of a study tour to the

Oxygen Towers in the city. LANSUM ESTATYES’ Oxygen Towers is the AP’ tallest project with 35 floors. CYW is able to convince the management of LANSUM and arrange a study tour to the Oxygen Towers for the senior members of CREDAI-VSP. It was organised in such a flawless manner that the 150-odd participants from the chapters of VSP and Vizianagaram expresses their unqualified appreciation for the efforts of CYW. It is after this event that Sri K. Ramakrishna Rao said “I am confident that CYW would elevate the status of CREDAI-VSP to higher levels”.

Brimming with energy and enthusiasm and endowed with the qualities of commitment and courage, CYW is destined to play a crucial role in future.

TWO YEARS OF INSPIRING AND EVENTFUL JOURNEY OF CREDAI-VSP’S YOUTH WING

CYW


Organizing Property Shows every year has been a major activity of the CREDAI-VSP Chapter. It would bring all stake holders, namely, the builder, the customer and sponsors and agencies and firms supplying all material required for construction of an apartment. The builder would have an opportunity to exhibit his products and interact with the potential customer visiting the Property Show. It would help build his brand image among the public and explain to the customer various incentives—both from the government and his own company—that are available to the customer. On the other hand the customer would have the opportunity to select his cream house from the variety of products that are on display at the Property Show. For the sponsor it would be the best opportunity to reach the builder and customer.

Property Show is an annual event and CREDAI-VSP had organized three such shows in the past. With each passing year, its importance had gone up and its reputation as an organization whose members ensured quality and timely

delivery of the product had been firmly established among the public. Last year it had organized its Property Show at the spacious AU Engineering College Grounds and the footfalls at that event had crossed the 35,000 mark. It was a grand success and all the participants had benefited from the show.

This year also it has finalized plans to organize its Property Show even on a bigger scale. Its Brochure had already been released by the Hon’ble Chief Minister Sri Nara Chandra Babu Naidu on 09.10.2017. The Show would be organized on 23rd 24th and 25th of December 2017 and the venue would be the same that is the AU Engineering College Grounds. Elaborate arrangements are made to see that visitors enjoyed their trip and builders and sponsors felt their purpose of participating is fulfilled. There would be cash prizes of Rs.5000/-,Rs.7000/-, and Rs.10,000/- for the walk-ins every hour and a bumper prize for the purchaser of a property at the Property Show. It would be too good an opportunity to be missed by the stake holders.

PROPERTY SHOWS OF CREDAI-VSP.

Chief Minister Sri Nara Chandrababu Naidu, releasing the Brochure of CREDAI-VSP Property Expo-2017 at a function at Fairfield Marriott Hotel in Visakhapatnam on 09.10.2017. Seen in the picture are (standing from left) Sri E. Ashok Kumar, Sri K.S.R.K. Raju, Sri K.Ramakrishna Rao, Sri K.V.R Raju, Minister Sri Ganta Srinivasa Rao, Sri P. Kotesewara Rao and Sri G.V.V.S. Narayana. The Expo would be organised on December 23rd 24th and 25th, 2017 at the AU Engineering College Grounds. CREDAI-VSP had conducted three Property Expos successfully and to the great satisfaction of sponsors, customers and builders and the present one is the fourth in the series.


BLAST FROM THE PASTImportant events from the Property Shows of CREDAI-VSP organised in

2014-15, 2015-16 & 2016-17 .

The then Union Minister, now Vice President Sri M.Venkaiah Naidu being presented a memento by the members of CREDAI-VSP, when he visited CREDAI-VSP Property Show in 2016-17.

Minister Sri Ayyanna Patrudu, selecting the lucky winner by draw of lots at the CREDAI-VSP’s Property Show 2015-16.

Minister Sri Ganta Srinivasa Rao releasing Brochure of CREDAI-VSP Property Show-2015-16.

Minister Sri Ganta Srinivasa Rao formally inaugurating the first Property Show of CREDAI-VSP -2014-15, by lighting the lamp.


YOUR ATTENTION PLEASE!

In the recent times the real estate industry is experiencing huge changes in its business environment with the introduction of RERA ACT, GST ACT and the changes in the Finance Act 2017. With the demonetization effect on the industry, slowly fading away the proposals made in the Finance Act 2017 brought much needed relief to the real estate industry. In this article the changes made by the Finance Act 2017 which have a bearing on the real estate industry are discussed in brief.

1. Change in the Holding period of asset for computation of capital gains As all are aware of the fact that the Income Tax in the form of capital gains has to be paid in respect of the transfer of property especially if it is held as an investment. The period of holding of the property was in order to treat it as “Long Term Asset” is 36 months. The Finance Act 2017 has reduced the holding period to 24 months

instead of 36 months. This will help the investors in reducing the tax liability as the Long term capital gain is taxed @20% flat and there are other investment schemes available to the assessees to invest the money and get exemption from tax. This move will help in the growth of second hand market of the properties.

2. Tax Holiday for development of affordable housing

Recent Amendments/changes in the Finance Act 2017 relating to real estate developers.

TAXES


The Finance Act 2016 has provided 100% deduction of the profits and gains of an assessee developing and building housing projects subject to certain conditions such as upper limit for the built-up area of residential unit comprised in the housing project does not exceed thirty square meters in the cities of Chennai, Delhi, Kolkata and Mumbai and any place, within the distance of twenty-five kilometers, measured aerially, from the municipal limits of the said cities; and sixty square meters in any other place. Further, for availing the benefit, the eligible project should be completed within a period of three years.

The Finance Act 2017 has made an amendment to this period of completion, instead of three years to complete the project, the period has now been extended to FIVE years. This provides a relief to the developers as it takes a considerable time for obtaining the statutory approvals from various authorities with respect to construction.

There are also other changes made in the Act which will benefit the developers such as instead of built up area of 30 sq.mtr and 60 sq.mtr., the carpet area of 30 sq.mtr and 60 sq.mtr. will be counted.

To omit the restriction of aerial distance of twenty-five kilometers from the municipal limits of the above said cities.

As a result, the 30 sq.mtr limit will apply only in case of municipal limits of 4 metropolitan cities while for the rest of the country including in the peripheral areas of metros, limit of 60 sq.mtr. will apply.

The size of residential unit shall be measured by taking into account the “carpet area” as defined in Real Estate (Regulation and Development) Act, 2016 and not the “built up area”, as

originally mentioned.

By changing the eligibility criteria of home sizes from built up area to carpet area the Government has tried to bring in larger sized homes within the ambit of affordable housing project.

3. Loss from House property is restricted to Rs 2 Lakhs

As per the provisions of the Income Tax Act 1961 the loss from self occupied property is restricted to Rs 2 Lakhs, where is the no maximum limit is prescribed for the loss from the let out property. The loss from the house property can be set off against income from any other head of income. Accordingly, any loss arising on account of the difference between the rental income and interest on home loan (without any limit) was allowed to be set off.

Now the Finance Act has restricted the loss under the head house property to rupees two lakhs that could be set off against any other head of income. For Eg a person is having a self occupied house on which interest of Rs 2 lakhs is paid and a let out property where the rent is say Rs 1,20,000/- and interest paid is Rs 2.5 lakhs. Before this amendment the loss from the house property would be Rs 3,66,000/- ( Rs 2 Lakhs on Self occupied house+ Loss of rented house of Rs 1,66,000/-( Rs 1,20,000-Std Decution of 30% i.e 36,000 and deduction of interest of Rs 2,50,000) . Now the loss is restricted to Rs 2,00,000/- and any excess loss shall be carried forward for set off to the future eight years.

This restriction of the loss to be set off in respect of the house property income(Income includes loss as per the provisions of Income Tax Act) will keep the potential investors who invest in house properties in order to save tax to look after other avenues of investments in order to

have better tax savings.

4. Change in Indexation

The Finance Act 2017 has amended the Section 48 of the Income Tax Act 1961 which relates to mode of computation of capital gain. Under the existing provisions of the said section, “indexed cost of acquisition” is defined to be an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the 1st day of April, 1981, whichever is later.

The Act has been amended so as to replace the reference of 1st day of April, 1981 with the 1st day of April, 2001.

This move will significantly reduce the capital gain tax liability of the assessees as the value as at 1st April 2001 can be adopted for the properties acquired before such date and will substantially increase the cost of acquisition resulting in reduction of capital gain and thus reduction of tax liability.

5. Tax liability in case of Joint Development agreements:

There are divergent views expressed by various judicial authorities in respect of taxation of the joint development agreements. It would be difficult for the landlords to pay taxes at the time of entering the development agreement with the builder when there is no cash flow in their hands and the consideration as per the agreement is paid in kind, purely in built up area.

The Finance Act 2017 has brought a change that the Capital gains arises to an assessee being an individual or Hindu undivided family, from the


transfer of a Capital asset, being land or building or both, under a specified agreement, the capital gains shall be chargeable to Income-Tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority. “Specified agreement” means a registered agreement in which a person owning land or building or both, agrees to allow another person to develop a real estate project on such land or building or both, in consideration of a share, being land or building or both in such project, whether with or without payment of part of the consideration in cash.

Hence in the case of Joint Development Agreement signed for development of property, by Individuals or HUF the liability to pay capital gain tax will arise in the year the project is completed. These provisions are not applicable to companies or firms.

It is also provided in the Finance Act that if the assessee transfers his/her share in the project to any other person on or before the date of issue of said certificate of completion, then the capital gains shall be deemed to be the income of the previous year in which such transfer took place.

This move will help the landlords as the tax liability moves to the year of completion of the project instead of year of entering the agreement.

6. No Notional Income on flats held as stock in trade by the builders

The Income Tax Act has a provision that, in the case of a house property, even if it is vacant, notional income is subjected to tax. In most of the cases of builders the unsold inventory of flats completed in all aspects is treated as stock in trade. The taxation authorities are considering the notional income and the builders are subjected to tax on the notional income.

There were certain arguments put forwarded by the developers that the notional income cannot be charged on the stock in trade. The Delhi High Court has delivered a verdict that such notional income is chargeable to tax. In order to strengthen the stand of the government with respect to taxation of such income this amendment has been made in the act. Further the amendment has also brought a breather to the developers also. The Amendment provides that where the house property consisting of any building and land appurtenant thereto is held as stock in trade and the property is not let during the whole or any part of the previous year, the annual value of such property for the period upto one year from the end of the financial year in which the certificate of completion of construction of the property is obtained from the competent authority shall be taken to be nil.

7. Exemption from Capital Gain Tax in the event of reorganization of State of Andhra Pradesh

The Finance Act 2017 has made a retrospective amendment w.e.f 01st April 2015 that any income chargeable under the head “Capital gains” in respect of transfer of a specified capital asset arising to an assessee, being an individual or a Hindu undivided family, who was the owner of such specified capital asset as on the 2nd June, 2014 and transfers such land under the Land Pooling Scheme covered under the Andhra Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015 made under the provisions of the Andhra Pradesh Capital Region Development Authority Act, 2014 and the rules, regulations and schemes made under the said Act, shall not be included in the total income of the assessee.

Specified capital asset” means,—

(a) the land or building or both owned

by the assessee as on the 2nd day of June, 2014 and which has been transferred under the scheme; or

(b) the land pooling ownership certificate issued under the scheme to the assessee in respect of land or building or both referred to in clause (a); or

(c) the reconstituted plot or land, as the case may be, received by the assessee in lieu of land or building or both referred to in clause (a) in accordance with the scheme, if such plot or land, as the case may be, so received is transferred within two years from the end of the financial year in which the possession of such plot or land was handed over to him

Thus there will be no tax on the farmers who have given their land for the construction of the Capital City Amaravati under land pooling scheme.

8. Acquisition of asset without consideration or inadequate consideration by firms/AOP and widely held companies:

Till now, Partnership firms, AOP and widely held companies were not liable to pay the tax on difference between Fair Market Value (FMV) and actual consideration exceeding Rs.50,000/-. In the case of Individuals or HUF they are already liable to pay tax U/s 56(2)(vii).

Finance Act, 2017 now requires such assesses (Individuals or HUF, firms, AOP and widely held companies) also to pay the tax u/s 56(2)(x) on the difference if the Fair Market Value is higher than actual consideration of movable or immovable asset.

However trusts, transactions between relatives, HUF partition etc. are still out of purview and not liable to pay the tax on the difference amount.

This will increase the tax liability if


the properties are sold for a lesser consideration when compared to the circle rate(SRO rate).

9. Changes in respect to cash payments

As per the provisions of the Income Tax Act upto 31/03/2017, any revenue expenditure incurred in cash (i.e. other than Account Payee Cheque /draft, NEFT, RTGS, Credit/ Debit Card ) exceeding Rs. 20,000/- per day per person (Rs. 35000 in case of a transport contractor) is not allowed as deduction u/s 40A(3). Now this limit of Rs. 20,000/- has been brought down to Rs. 10,000/- per day, per person. However, the limit of Rs. 35,000/- for payment to transporter continues.

Till the assesement year 2017-18 there was no restriction on the payment in cash for the acquisition of any asset. Now with effect from AY 2018-19, cash payment exceeding Rs. 10,000/- per day person made otherwise than through Account Payee Cheque / draft, NEFT, RTGS, Credit/ Debit Card would not be considered as part of the cost of assets and accordingly such amount would not be considered for the purpose depreciation nor would be deemed as cost at the time of sale of such asset.

This amendment will increase the tax liability if the assets are purchased in cash as no depreciation is allowed on the value even if the transactions are genuine one.

10. Receipt of cash in excess of Rs 2,00,000/-

The Finance Act 2017 has brought in a provision and introduced a Section 269ST where in the receipt of cash has been restricted to below Rs 2,00,000/-in the case of following:

a) Aggregate receipt of Rs. 2 Lakhs or more from a person in a day

b) Aggregate receipt of Rs 2 Lakhs or more in respect of a single transaction

c) Receipt of Rs 2 Lakhs or more in relation to one event or occasion from a person

In the case of violation of the provisions, the receiver of such money is subjected to penalty equal amount. This section has wide repercussions and includes the receipt of payment of an invoice in several installments (if aggregate exceeds Rs. 2 Lacs). Even the sale of immovable property or movable property is covered. Hence utmost care has to be taken as there is a system prevalent in the society that in case of registration of properties, cash consideration is passed at the time of execution of the deed. This provision prohibits such transactions and the mode of payment has to be through banking channels only. Even if a part consideration for the property in excess of Rs 2 lakhs is received in installments also for a single sale, these provisions are attracted and the receiver is liable for penalty.

11. TDS on payment under joint development agreement w.e.f. 01 April 2017

As per Section 194-IC of Income Tax Act, 1961 (Inserted by the Finance Act, 2017, w.e.f. 1-4-2017 ) Any person responsible for paying to a resident any sum by way of consideration (not being consideration in kind) under a joint development agreement, is responsible for tax deduction under section 194-IC. The rate of tax is 10% if the PAN is available and 20% if PAN of the recipient is not available.

12. Reporting of cash deposits In ITR:

The ITR forms have a disclosure requirement in respect of the cash deposited during the period from 09/11/2016 to 30/12/2016 (if aggregate

cash deposits during the period is Rs 2 Lacs or more). Companies are also required to report the cash transactions in their annual reports with respect to transactions in Specified bank notes and other notes during the above said period.

Apart from the changes the affordable housing projects have been provided with Infrastructure project status. This will help the developers of such projects to avail bank finance or refinance from the financial institutions at a lower rate.

With the above changes and introduction of the RERA and GST it is anticipated that the industry gets a boost and generates much employment and have a better future. Only time can tell whether the changes made as discussed above will help the industry or otherwise.

Disclaimer

The view expressed above is that of the author. The above suggestions/provisions of law depend on case to case basis. The author or the publisher does not take any responsibility on the action taken by readers. Readers are advised to contact experts in relation to their case.

The author is a practicing Chartered Accountant and he may be contacted at [email protected] or @9848186662.

SRI K. MAULAYYAA SENIOR MEMBER OF CREDAI- VSP

CREDAI- VSP

SHRADHANJALI


GIRIPRADAKSHINAM, AN IMPORTANT ANNUAL EVENT.

SIMHACHALAM


Hills have a special place for the Hindu devotees. Most of the deities they worship dwell atop hills, replete with medicinal and aromic plants. Hills are also known for their bio-diversity and flora and fauna. When one mentions hills as dwelling places of deities, the Seven Hills of Lord Venkateswara Swamy who is the richest god worshipped by millions of devotees, occupies the top slot. Then there is Srisailam, the abode of Sri Mallikarjuna Swamy and his consort Bhramaramba.

One such important pilgrim centre is Simhachalam where the presiding deity is Sri Varaha Lakshmi Nrusimha Swamy, an incarnation of Lord Vishnu. What distinguishes this abode of Nrusimha Swamy is a unique annual festival called Giripradishnam. Giripradakshinam is going around the hill on foot, which means trekking a distance of more than 30 kms !! Sounds unbelievable, but this was celebrated every year on Gurupurnima Day and going by the ever increasing number of participants, its importance has

also been going up. Devotees in their thousands from far flung places throng the pilgrim centre to participate in the all important Giripradakshna. The unshakable belief was that participation in this annual festival would result in their ambitions and desires getting fulfilled. This was also a panacea for their woes, if any. This year, an estimated five lakh devotees had trekked around the Simhachalam hill. One has to see to believe the sea of devotees trekking the distance starting from the first step at the entrance of temple and chanting the name “Govinda Govinda or Appanna Appanna” . Traditionally, the tastefully decorated chariot with the replica of Nrusimha Swamy idol, starts its journey from Simhachalam and reaches back after completing the 32 kms journey the next day. This journey would be flagged off by the hereditary trustee from Pusapati Raj’s family of Vizianagaram. Devotees follow the chariot. Folk dances, songs, bhajans by the devotees mark celestial journey reverberate the entire journey. Surprisingly no one seems to be tired and there was no

feeling of fatigue. A happy aspect for the trekking devotees is that most part of the journey is on BRTS road or on well developed road. Voluntary organisations had participated in a big way this year and arrangement had also been made for supply of water etc to devotees on the way and a large contingent of police was deployed to ensure peaceful journey.

For those who were not in a position to walk the 32 km distance for various reasons, there is an alternative. If a devotees makes the Pradikshinam around the temple for 24 times, it is considered as good as covering the 32 km by foot. Temple authorities had also made arrangements for this Pradikshinam around the temple premises. This year the entire festival passed off peacefully and happily and every participant went back to home with a sense of fulfilment.


Mr Y. K. K. Sastry Area Manager, Visakhapatnam 8332928335 | Mr H. Raghavendra Area Manager, Gajuwaka 9848403558

GST IS A TRANSFORMATIONAL BUSINESS PROCESS REFORM ALL COMPANIES HAVE TO FOLLOW.

For close to two years now, Revenue Secretary Hasmukh Adhia has kept the implementation of GST on top of his list of priorities. His mission come to fruition now. Earlier this month Adhia explained the nuts and bolts of the new tax regime to readers of The Indian Express in Part I of this special Explained event, in New Delhi.

What is so transformational about GST? We have heard that it is the biggest indirect tax reform since Independence. In what manner will it transform India’s entire tax structure?

If you see the value chain from raw

material to retail, today, it’s fractured for the purpose of taxation. The manufacturing part of the value chain is taxed by the Centre, and the trading part is taxed by the states. Because it is not integrated, there is a disconnect. Now, what The Constitution (122nd Amendment) Bill (GST Bill) does, is it de-fractures and integrates this entire value chain for the purpose of taxation. States can tax manufacturing, the Centre can tax trading, and states can tax services. So both the Centre and the states will concurrently charge duty on the entire value chain, and that’s your dual VAT, that is, the Central GST and the State GST.

Now, what is the implication of this? Substantial amount of non-compliance takes place in the trading section of the value chain. That is going to come down because they are going to declare more transactions in order to avail the credits earlier. That is the transformational aspect of GST. The second transformational thing is abolition of Entry 52, which is the entry tax. We are one political nation since 1947, but we are not one common market. It has been estimated by economists that 16% of a truck’s time carrying goods is spent at check posts. So what the end of entry tax does is, goods can freely move,

GST


and hopefully there will be fewer traffic snarls as well! And all the other taxes like luxury tax, entertainment tax, purchase tax have been abolished and subsumed [into the GST].

People fear the multiplicity of rates may create disputes. I would like to say it will not create disputes of classification and valuation because each product is uniquely defined in terms of an internationally accepted nomenclature. States which, in their state VAT, were not following HSN (harmonised system of nomenclature), will now start following the HSN, which is very useful because whenever you export goods, the world over it is known only by its classification.

But conceptually, I feel this whole argument of the rich and poor for taxation is flawed to some extent. My own view is that a lot of the goods that the rich consume, the poor make. So this whole thing that if you tax the consumption of the rich you are helping the poor doesn’t work on the indirect tax side. For example, we go to a 5-star hotel, the security person there is from [say] Darbhanga in Bihar, the waiter is from [say] Jharkhand, the cook is from [say] Odisha or Bengal, so what are you trying to do by saying I am taxing the rich who go to hotels is indirectly affecting the poor. So what I wrote in a recent article is, this rich-poor dichotomy for taxation, at least on the indirect side, is flawed. We should have one single rate. But taxing the rich — you should do that through direct taxation, by bringing them into the tax net and taxing them progressively. Indirect is a bad instrument to achieve socioeconomic objectives. It cannot do it, it distorts by its very nature.

Yes. In fact, one of the things that GST is going to do is that poorer states are going to get a far higher revenue growth, because they are destination states or consumption states. This a great thing. Bihar was the first

state to pass the GST legislation. There are estimates to show that the growth rate in UP and Bihar, the compensation rate that the Centre has worked out is assuming about guaranteeing 14% over the 2015-16 base. But UP, Bihar may do even better. There are some estimates that revenue may grow at 25%. On the other hand, the richer states, the organised manufacturing states like Maharashtra, have said that our revenues are going to be affected. Now, that also is not true — because the rich manufacturing states are also service tax hubs, so what they lose maybe on CST (central sales tax), which is an origin-based tax, they will gain on services. Maharashtra has Pune and Mumbai, Karnataka has the Bangalore service tax hub, Tamil Nadu has Chennai. We did a study in Maharashtra, and found that from octroi, Maharashtra collects Rs 15,000 crore, but the service tax accruing to Maharashtra as destination state will be about Rs 20,000 crore to Rs 25,000 crore. So all states are going to grow, but the poorer states will grow at a faster rate in terms of growth of revenue, which is not a bad thing, because they are growing on a low base.

Actually, we have lost an opportunity to really have a very wide GST base, which was the recommendation of the Thirteenth Finance Commission. Today, we have come only halfway. GST is applicable to under-construction flats and commercial buildings, not when they are completed. But you could have taken that audit trail and the chain right into the next stage. And all the cement and steel duties could have been given as input credit, you would have had a whole chain, and you would have actually known the extent of real estate transactions in India.

But I am told the Finance Minister wants to do it in the second round. His point is let the camel enter the tent, let’s first get GST in. But you are absolutely right, the base of GST has been reduced,

and the full advantages of the tax we have not been able to get.

In fact, there is now a feeling that this may be deflationary. Prices may actually come down. GST may actually bring about a reduction in duty on the goods side. The biggest gains are in food. I am told the abolition of purchase tax and mandi tax, the kind of taxes that the farmer had to pay, is going to give a big boost to agriculture on the food side. The whole intermediary chain between farmer and buyer is going to be de-layered. That’s a big benefit. For example, everybody said Madhya Pradesh is the big agriculture story, so why are they facing farmer riots? The answer is they are paying the price of overproduction without providing storage opportunities and, therefore, the remunerative prices have fallen. Good things happen, but unless they are complemented with other measures, you can’t do anything. You need a good storage mechanism. Maharashtra has had record production of pulses, tur, in Marathwada, but they have not procured it to the extent it was promised. Prices have crashed, and the anguish is more because production is so good.

Pre-GST, the trader cheated because he was not eligible for many credits, as only VAT credits were available. So the trader bought from somebody who was also exempted from VAT. Exempted-to-exempted transactions living in the shadow economy were going on. Now, he will be eligible for credits of central duties paid on input goods, for central duties paid on input services, for duties paid on countervailing duty side on imports. If he doesn’t declare his transactions, he will lose all these credits. So here, compliance will take place because of self-interest, not because of the moral transformation of a thief. He is going to cheat less because it will be profitable for him to not cheat. But the interesting thing is, he will show


transactions just enough to avail the credit, the real benefit is going to come on the direct tax side. GST revenues on the trading side may not show a dramatic increase, but on the direct tax side, there’s going to be a dramatic increase. This will be facilitated through the GSTIN number. After implementation of GST, nobody will be able to carry out any business in India without a GSTIN number, which is a 15-digit code, the first two digits of which are state numbers, and the next 10 digits are income tax PAN. By incorporating PAN in the GSTIN number, the indirect tax and direct tax databases are linked.

For the first time in the history of this country, the government is better prepared than industry. Industry always thought GST would not pass in Rajya Sabha. GST is not just a tax reform, it is a transformational business process reform. All companies will have to change the way they do business. They have to integrate their taxation systems with their business processes. But the

biggest challenge is technology. It is expected that there will be 80 lakh people registered under GST. And of course, the income tax registration is 540 lakh. Now out of these 80 lakh, 70 lakh would be small and medium businesses. For that the GSTN has created something called offline utility. You can directly send your details in Excel format to the utility, and GSTN captures it and converts it into the form. But the problem is, if you have made errors, it is very difficult to revise. So, filters will now be provided to remove errors.

People are very worried about giving invoice-wise details, but this problem is overstated. Invoice details are to be given only in B2B transactions. The interesting thing is GST will come on July 1 and, by July 10, you are expected to file details of your outward supplies; automatically, your inward supplies get auto populated because you are the buyer for someone as well. By July 15, you can see what has been populated as your inward supplies, and you can

then accept some or not accept some. Where you don’t accept, you flag — and within two months, you have to reconcile; where you don’t reconcile, you cannot claim the credit. The person who takes credit of duty paid is made responsible for that person paying duty.

There is a system of compliance rating, so over a period of time, all suppliers will be rated on compliance. If somebody gets a rating of 3.5, why would you want to buy from them? What this is trying to do is discipline delinquent behaviour through a system of penalties and rewards, and this is going to pay very rich dividends. In a year’s time, I expect revenue to boom because the scale of cheating in India is so huge, especially in the wealthiest parts of the country. GST will probably do what demonetisation couldn’t do to that extent. It will ensure formalisation of the informal sector in a much more effective way.


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FREQUENTLY ASKED QUESTIONS (FAQ’S) ON RERA ACT, 2016 & ANDHRA PRADESHREAL ESTATE (REGULATION &

DEVELOPMENT) RULES, 2017BY SRI P. KOTESWARA RAO, PRESIDENT, CREDAI-VSP

1. Why the Real Estate Act, 2016 has come ? For regulation and promotion of the real estate sector in an efficient and transparent manner and to protect the interest of consumers in the real estate sector.

2. From which date the Act has been come in to force ? 1st May, 2017.

3. Where & How to register under this RERA Act ? We have to register at RERA Authority thru web portal, once the web portal is launched. A.P. RERA Committee has been formed, Chairman - Justice V. Rama Subrahmanian, High Court Justice for A.P & Telangana. Committee Members - Additional Chief Secretary or Principal Secretary of MA & UD. Law Secretary of A.P. 4. Is it necessary to get registration of the project ? Every promoter shall make an application to the Authority for registration of the real estate project and accompanied by such fee as may be specified by the Authority as per the Act U/S 4. (1). RERA Act, (Page No. 7, Chapter-II, U/S 4 (1)) Where the real estate project is to be developed in phases, the promoter shall obtain registration for each phase separately, as per the Act Under Explanation to Section-3 (2) (c). RERA Act, (Page No. 7, Chapter-II, U/S 3 (2))

5. When can a promoter commence the activity ? Soon after registration in RERA, U/S 3. (1) of the Act. • No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, without registering the real estate project with the Real Estate Regulatory Authority under this Act. RERA Act, (Page No. 7, Chapter-II, U/S 3 (1))

6. Who will not come under this Act ? a) Plot Area upto 500 sq.mts. and upto 8 apartments, will not come under this Act, as per the Act U/S 2 (a) of Chapter-II. RERA Act, (Page No. 7, Chapter-II, U/S 3 (2) (a))b) On-going projects which fulfil any of the following criteria will not come under this act as per U/S 2 (o) of AP RERA Rules, 2017. RERA Act, (Page No. 3, Chapter-I, U/S 2 (1) (o)) 1. Where all slabs are laid in Apartment/Housing projects. 2. Where 50% of sale deeds/lease deeds of the Apartments have been executed. 3. Where development works have been completed and application has been filed to the competent authority for issue of Completion or Occupancy Certificate.(development works means providing of proposed facilities if any, including sewage system, drinking water supply, electricity etc.,) c) Where the promoter has received completion certificate for a real estate project prior to commencement of this act will not require registration, as per the Act U/S 3.(2)(b). RERA Act, (Page No. 7, Chapter-II, U/S 3 (2) (b))d) Renovation or repair or re-development which does not involve marketing, advertising will not require registration, as per the Act U/S 3. (2) (c). RERA Act, (Page No. 7, Chapter-II, U/S 3 (2) (c))

7. Who will come under this Act ? a) Construction in a Plot Area is more than 500 sq.mts. / more than 8 apartments. RERA Act, (Page No. 7, Chapter-II, U/S 3 (2) (a))b) In on-going projects, who will not fulfil the conditions laid down U/S 2 (o) of AP RERA Rules, 2017. RERA Act, (Page No. 3, Chapter-I, U/S 2 (1) (o)) c) On-going project should be registered within 90 days for the date of commencement of the Act i.e., 01-05-2017.RERA Act, (Page No. 7, Chapter-II, U/S 3-A (2)) 8. Under what circumstances the Registration will be cancelled/revoked ? The Authority may, on receipt of a complaint or suo motu or on the recommendation of the local competent authority, revoke the

registration granted under section 5 as per the Act U/S 7. (1). (a) If the promoter makes default in doing anything under this Act. (b) If the promoter violates any of the terms or conditions of the approval given by the competent authority. (c) If the promoter is involved in any kind of unfair practice or irregularities. RERA Act, (Page No. 10, Chapter-III, U/S 7 (1)) There will be penal actions against revocation. 9. Will an individual comes under this Act if he develops his own property? No, he will not come under this Act, if an individual develops his own property without any profit motto and real estate activity U/S 3. (1) of the Act. RERA Act, (Page No. 7, Chapter-II, U/S 3 (1)) 10. How does the Act Impact Joint Promoters or joint Venture Agreements or cases of joint development with land owner, where landlord and promoter are two different parties but both are beneficiaries of sale of project? Both the Promoters and the landlord or any such parties which are beneficiary of a sale of a project and receive payments from allottees as Co-Promoters and hence both are liable as per the act. RERA Act, (Page No. 6, Chapter-I, U/S 2 (zk) (v))

11. What is Carpet Area ? “carpet area” means the net usable floor area of an apartment, within the external walls, but includes the area covered by the internal partition walls of the apartment. RERA Act, (Page No. 2, Chapter-I, U/S 2 (k))

12. What is Common Area ? “common area” means the stair cases, lifts, staircase and lift lobbies; the premises for watch and ward staffs; installations of central services such as electricity, gas, water tanks, sumps, motors, fans, compressors, ducts and all apparatus connected with installations for

ARTICLE


common use; RERA Act, (Page No. 3, Chapter-I, U/S 2 (n))

13. Is it permissible to sell parking to allottees ? The position of parking is as follows: • Yes, Garage as defined in the Act is permitted to be sold. • Yes, Covered Parking Area as defined in the Maharashtra Real Estate (Regulation and Development) Rules, 2017 is permitted to be sold. • No, Open Parking Area: This has been clearly included in the definition of “Common Areas” which need to be conveyed to the Association of Allottees after Occupancy Certificate is received. Hence, sale or allotment of Open Parking Areas by the Promoter is not permissible RERA Act, (Page No. 4, Chapter-I, U/S 2 (y))

14. What are the provisions made in the act to receive purchase consideration from a consumer ? A promoter shall not accept a sum more than ten per cent of the cost of the apartment, as an advance payment or an application fee without sale agreement, as per the Act U/S 13. (1). RERA Act, (Page No. 14, Chapter-III, U/S 13 (1)) 70% of the amounts (including advance / application fee) realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose, as per the Act U/S 4. (2) (L) (D). RERA Act, (Page No. 8, Chapter-II, U/S 4 (2) (l) (D))

15. What are the provisions made in the act to withdraw the amount deposited in the separate account? Provided that the promoter shall withdraw the amounts from the separate account, to cover the cost of the project, after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project, as per the Act U/S 4. (2) (l) (D). RERA Act, (Page No. 8, Chapter-II, U/S 4 (2) (l) (D))

16. What are the defect / warrant liabilities ? In case 1) structural defect, 2) defect in workmanship, 3) quality, 4) provision of services, and 5) any other obligations as per

the agreement of sale for a period of five years, as per the Act U/S 14. (3). RERA Act, (Page No. 15, Chapter-III, U/S 14 (3))

17. Transfer of Liability to the 3rd Party ? The promoter shall not transfer or assign his majority rights and liability of his projects to a third party without consent of 2/3 allottees and written approval from the authority, as per the Act U/S 15 (L). RERA Act, (Page No. 15, Chapter-III, U/S 15 (1))

18. Penalties against offences ? • Penalty for Non-Registration, upto 10 per cent. of the project cost, as per the Act U/S 3. • If promoter does not follows orders of the authority, imprisonment may extended upto 3 years or with fine which may extend upto further 10 per cent or with both. • On payment of compound fee, no imprisonment (that offence shall be set at liberty). • For furnishing false information at the time of RERA registration, penalty may extended upto 5 per cent. Sl. No. Offence Money to be paid for compounding the offence 1. Imprisonment Under Sub-Section (2) of section 59, 10% of the estimated cost of the real estate project. 2. Imprisonment Under Section 64, 10% of the estimated cost of the real estate project. 3. Imprisonment Under Section 66, 10% of the estimated cost of the plot, apartment or building, as the case may be, of the real estate project, for which the sale or purchase has been facilitated. 4. Imprisonment Under Section 68 (allottee) 10% of the estimated cost of the plot, apartment or building, as the case may be. A.P. Real Estate Rules-2017, (Page No. 29, Chapter-XI, Rule No. 47)

19. Rate of interest payable by the promoter and the allottee ? The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India Prime Lending Rate plus 2 %. A.P. Real Estate Rules-2017, (Page No. 17, Chapter-V, Rule No. 16)

20. If allottee claims Refund ? Allottee is eligible for claiming refund with applicable interest (SBI PLR + 2%) and compensation if any. Refund shall be payable by the promoter to the allottee within 45 days

from the due date. A.P. Real Estate Rules-2017, (Page No. 17, Chapter-V, Rule No. 17) RERA Act, (Page No. 16, Chapter-III, U/S 18 (1) (b))

21. Insurance of Real Estate Project ? The promoter shall obtain all such insurances as may be notified by the appropriate Government, including but not limited to insurance in respect of (i) Title of the land and building as a part of the real estate project; and (ii) Construction of the real estate project. Note: Title Insurance of site or building is not yet introduced in India by any insurance companies so far. Hence, it is not applicable for time being. As per the Act U/S 16. (1). RERA Act, (Page No. 15, Chapter-III, U/S 16 (1)) 22. Extension of Registration ? Registration granted U/S 5. may be extended for a period, not exceeding one year, on a request by the promoter due to “force majeure” on payment of prescribed fee as per the Act U/S 6. “force majeure” means a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project. RERA Act, (Page No. 9, Chapter-II, U/S 6) 23. Maintenance Charges ? The promoter shall be responsible for maintenance of essential services on reasonable charges, till taking over of maintenance by the association, as per the Act U/S 11 (4) (d). RERA Act, (Page No. 13, Chapter-III, U/S 11 (4) (d))

24. Formation of the association ? The promoter shall enable the formation of association within a period of 3 months of the majority allottees, as per the Act U/S 11 (4) (e). RERA Act, (Page No. 13, Chapter-III, U/S 11 (4) (e))

25. Power to remove difficulties U/S 91: Stake holders may appear at concerned authority for removing the difficulty in the provisions of this Act. Provided that no order shall be made under this section after the expiry of two years from the date of commencement of this Act. RERA Act, (Page No. 36, Chapter-X, U/S 91 (1))


HOUSING LOANS

SBI AND CREDAI SIGN AGREEMENT FOR EASY HOUSING LOANS

SBI and CREDAI signed an agreement for easy housing loans.

New Delhi: State-owned SBI and realtors’ body CREDAI have signed an agreement to provide loans at a concessional rate to builders as well as customers for affordable housing projects. SBI and CREDAI have signed a memorandum of understanding (MoU) to collaborate and work towards the development of the real estate sector, specifically through the affordable housing and green housing projects.

The duration of the agreement is for a period of three years, State Bank of India (SBI) said in a statement. “We have signed an MoU with CREDAI. We will be providing 10 basis points concession to home buyers and 10-35 basis points to CREDAI’s developer members,” SBI Managing Director (National Banking Group) Rajnish Kumar told Press Trust of India.

He said SBI is a major player in home loans segment with 25 per cent market share. Earlier this month, CREDAI had announced that its members are launching 373 affordable housing projects comprising 2.33 lakh units with an investment of over Rs. 70,000 crore.

SBI, the county’s largest bank and mortgage lender, will support CREDAI as their national banking partner and provide loans at concesssional interest rate towards construction finance.

“The lower cost of interest to builders will further reduce the cost of apartment. I hope developers will pass on this benefit to consumers,” Kumar said. For consumers, SBI has launched an exclusive tailor made scheme for affordable housing, ‘SBI Hamara Ghar’, which will ease the process and enable maximum number of consumers to avail home loan for these projects.

“This initiative will help millions of home buyers fulfil their dream of owning a home. In the long run, it will give a boost to the real estate industry and economy as a whole, elevating the citizens from aspirants to actual home owners,” Kumar said.

CREDAI President Jaxay Shah said: “Rebate on construction finance by SBI will be instrumental in facilitating a more affordable ecosystem which will lower the construction costs and enable the developers to pass on the benefits to the consumers.”

SBI and CREDAI have also tied up for development of green real estate projects. The bank will be providing an interest concession for the construction of green projects and also a processing fee waiver for home loans under SBI Green Home Loans.

SBI has agreed to give concessional rate to builders as well as customers for affordable housing projects.


Senior members of CREDAI-VSP including Chairman, Sri GVVS Narayana,President Sri P.Koteswara Rao, Hon Secretary Sri KSRK Raju,Treasurer Sri E.Ashok Kumar,immediate past Chairman Sri K.Ramakrishna Rao,presenting a memorandum to Minister Sri Ganta Srinivasa Rao on the issue of sand.

GVMC Commissioner, Sri M.Hari Narayana,handing over to a student of GVMC Primary School, note books and stationery donated by CREDAI-VSP under its CSR programme. (Standing from left) CREDAI-VSP EC member Sri K.Nagendra, Hon Secretary Sri KSRK Raju,President Sri P.Koteswara Rao,Joint Secretaries Sri N.Srinivasa Rao, A.Sivanand and EC member Sri Azizulla Sherief.

Happy members of CREDAI-VSP with happier students of GVMC Primary School at the event to distribute note books and other stationery at the school premises.

Chairman, Sri GVVS Narayana, addressing media persons on the issue of sand. He was flanked by Hon Secretary Sri K.S.R.K Raju, and President Sri P. Koteswara Rao.

GVMC Commissioner, Sri M. Hari Naryana, addressing school children after distribution of note books and stationery provided by the CREDAI-VSP under its CSR activity on 20-06-2017 (Sitting from left) CREDAI-VSP, EC Member Sri K.Nagendra, CREDAI-VSP Hon Secretary Sri KSRK Raju, President Sri P. Koteswara Rao, K.S.Varma, Additional Commissioner, Smt Usha Rani, Educational Officer and Smt.Hymavathi,HM of the School.

OPTICAL RECORDING OF CREDAI-VSP’s IMPORTANT EVENTS


CREDAI-VSP’s President Sri P.Koteswara Rao, Hon Secretary Sri KSRK Raju Vice President Sri B.Srinivasa Rao,Joint Secretary A.Sivanand,Treasurer Sri A Eshok Kumar and EC member Sri Azizulla Sherief handing over audio device to the management of GVMC School at a meeting in the school premises.

Property Expo Brochure was released at FAIRFIELD Marriott Hotel in Visakhapatnam on 09.10.2017. MLA Sri Vishnu Kumar Raju, Chairman of CREDAI-AP, Sri K.Subba Raju, President Sri A Siva Reddy, former President of CREDAI-National Sri C Sekhara Reddy, Chairman of CREDAI-VSP Sri GVVS Narayana, President Sri P.Koteswara Rao, Hon Secretary Sri KSRK Raju, Treasurer Sri E Ashok Kumar,Youth Wing Coordinator Sri KVR Rama Raju, former Chairmen of CREDAI-VSP Sri K.Ramakrishna Rao Sri K.S.Chandran and EC members of CREDAI-VSP are seen in the picture.

Chief Minister Sri Nara Chandrababu Naidu,releasing the Brochure of CREDAI-VSP Property Expo-2017 at a function at Fairfield Marriott Hotel in Visakhapatnam on 09.10.2017. Sri E.Ashok Kumar,Sri KSRK Raju, Sri K.Ramakrishna Rao, Sri KVR Raju, Sri P.Kotesewara Rao and Sri GVVS Narayana. The Expo would be organised on December 23rd 24th and 25th, 2017 at the AU Engineering College Grounds. CREDAI-VSP had conducted three Property Expos successfully and to the great satisfaction of sponsors, customers and builders.

CREDAI National President Sri Jaxay Shaw addressing the 17th NATCON 2017, in London on August 10th.

CREDAI-VSP members, along with CREDAI-National Chairman Sri Gitamaber Das (4th from left) at the 17th CREDAI NATCON ,held from August 10-12,in London.( Standing from left), Sri N.Srinivasa Rao,Sri KSRK Raju, Sri K.Srinivasa, Sri GVVS Narayana, Sri B.Srinivasa rao,Sri B.Rajasrinivas,Sri V.Murali Krishna, Sri K.Venugopal and Sri E.Ashok Kumar.


CREDAI-VSP Chairman, Sri GVVS Narayana, offering a bouquet to Union Minister Sri Piyush Goel, at an interactive session on GST,held on 21st July. Visakhapatnam MP Sri K. Haribabu is also seen in the picture.

Sri MSN Raju,CREDAI-VSP member welcoming Minister Sri Nara Lokesh by offering a bouquet at an interactive meeting with the CREDAI-VSP members in Visakhapatnam on August 24th .

Executive Members of CREDAI-VSP made a courtesy call on GVMC’s Chief City Planner Ms. R.J.Vidyullatha, who took over charge recently. They took the opportunity to represent some of the important issues, bothering CREDAI members and she had assured to atten to all problems. Sarvasree GVVS Narayana ,Chairman, P.Koteswara Rao President,B.Srinivasa Rao and Ch.Govinda Raju,both Vice Presidents,E.Ashok Kumar,D Sivagovindam,A.Sivanand, J.Bhoja Raju and V.Murali Mohan are seen on the picture.

Meeting with IT Minister Sri Nara Lokesh on August 24th turned out to be a lively interaction session. Here Senior member of CREDIA-VSP Sri Raja Srinivas putting forth an important points as other members look.

Sri J. Mallikarjunudu (Balaji), CREDAI-VSP member welcoming Minister Sri Nara Lokesh by offering a bouquet at an interactive meeting with the CREDAI-VSP members in Visakhapatnam on August 24th .


Sri G.S. Raju, CREDAI-VSP member welcoming Minister Sri Nara Lokesh by offering a bouquet at an interactive meeting with the CREDAI-VSP members in Visakhapatnam on August 24th .

CREDAI-VSP office bearers presenting a memento to Sri Nara Lokesh,Minister for IT,PR and RD after a meeting in Visakhapatnam on August 24th . Sri P.Koteswara Rao President, Sri KSRK Raju, Hon Secretary, Sri K.Ramakrishna Rao,Sri MVV Satyanarayana,Sri V.Dharmender,Sri Azizulla Sherief and Sri P.Ramakrishna are seen in the picture.

Sri M. V. Durga Prasad, Senior Advocate AP High Court and Chief Guest, addressing participants at the Workshop on RERA organised by CREDAI-VSP on August 5th. (Sitting on the dais from left) Sri P. Koteswara Rao, President CREAI-VSP, Sri C.Sekhara Reddy,former President CREDAI National,Dr.Purushottam Reddy, DTCP (Retd.),Sri GVVS Narayana Chairman CREDAI-VSP, M.V.Sunil Kumar, Hon Secretary IIA, Vizag Chapter, Sri Das,Yes Bank andSri A.Sivanand Joint Secretary,CREDAI-VSP.

Immedaite Past ChairmaN Sri K.Ramakrishna Rao,felicitating Minister for IT,PR &RD Sri Nara Lokesh,on behalf of CREDAI-VSP after an interactive meeting in Visakhapatnam on August 24th

Chairman of CREDAI-AP, Sri K. Subba Raju addressing participants at the Workshop on RERA, conducted on August 5th . (Sitting from left) Sri P. Koteswara Rao, President CREDAI-VSP, Sri C. Sekhara Reddy, Past President Credai National, M.V. Durga Prasad, Senior Advocate, AP High Court, Sri B. Purushottam Reddy DTCP (Retd.) Sri GVVS Narayana Chairman CREDAI-VSP,Sri M.V.Sunial Kumar,Hon Secretary, IIA, Vizag Chapter, Sri Das, Yes Bank and Sri A. Sivanand Joint Secretary CREDAI-VSP.


A large section of audience, attentively hearing the speech being delivered by the Chief Guest and Senior Advocate,AP High Court, Sri M.V.Durga Prasad at the Workshop on RERA on August 5th.

Sri CS Sarma, volunteer of Isha Foundation, explaining the concept of Rally For Rivers at the Regular meeting on 4th September. Sri P.Koteswara Rao Sri GVVS Narayana,Sri KSRK Raju and a lady volunteer of ISHA foundation are also seen.

Sri Ramakrishna Sangu, Taxation Specialist, delivering key note address at the ‘Workshop’ on GST at the regular meeting held on 4th September. Sri P. Koteswara Rao Sri GVVS Narayana and Sri KSRK Raju are seen on the dais.

CREDAI-VSP Member, Sri T. Srinivas Rao presenting a memento to Sri Ramakrishna Sangu, Specialist in Taxation, while President Sri P. Koteswara Rao, Chairman Sri GVVS Narayana and Treasurer Sri KSRK Raju seen clapping in appreciation.

A large section of audience, attentively hearing the speech being delivered by Sri Ramakrishna Sangu Taxation Speecialist, at the GST Workshop on September 4th.


NASHIK: State RERA chairman Gautam Chatterjee on Saturday said after August 1, all builders will have to mention their RERA registration numbers in advertisements.

As per a clause of the Real Estate Regulation and Development Act, Maharashtra, it is compulsory for developers to give information about their projects from May 1, so that consumers can check what they are offered and whether the promises made by builders are fulfilled or not. Builders will also have to regularly update the details of their ongoing projects.

“The realtors have been given three months’ time from May 1 to complete the online registrations of their

ongoing projects and also the new projects. After August 1, they will have to compulsorily mention the RERA registration number in their advertisements,” said Chatterjee.

“Since May 1, 900 agents and 16 projects have been registered in state . Yet I am not

satisfied as there are at least 30,000 projects which need to be registered immediately,” he added.

Registration of a project is not needed if the promoters have received completion certificates for either renovation, repair or redevelopment before May 1. Phase-wise uploading of the project can be done and promoters have to obtain registration under

this Act for each phase separately. All the necessary disclosures and documents will have to be submitted to the authority online after which a registration number will be allotted. After the layout is approved by the municipal corporation, the builders can register first building and consequently the others.

“The disclosures will be made public using IT platform. The independent regulator will see if everything is being submitted. Hence, builders should tell the truth in the disclosure. If they do not, then, it will be violation of the Act,” Chatterjee said. He said complainants can approach the grievance redressal cell and the case would be resolved within seven days. One case can go to one court only not multiple courts. All kinds of permissions for new proposals would be given by the local government under Right to Services Act.

“The Act is like empowering people. This is the most crucial decision of the government in independent India. The consumer can see the status of the project online and if there is any violation of the Act, the person can complain on the website itself. This is an important industry for the country’s economy. The guilty will be punished while those doing good work will flourish” he said.

Chatterjee said the main aim is to give houses to those who do not have them in their possession. If consumers are staying in houses for years, but do not have occupation/completion certificates, they should get deemed conveyance done.

RERA REGISTRATION NO. MUST IN ADVERTISEMENTS BY REALTORS FROM AUGUST.

RERA Reg. No.002017


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