APPLICATION FOR RERA REGISTRATION

Ø Application of registration u/s4 to be made as per the Form ‘A’ prescribed under Rule 3(3) and along with the same declaration has to be filled in Form ‘B’ as per Rule 3(6).

Ø The concept of 70:30 is mentioned in section 4(2)(i)(d).

Ø Registration is guaranteed under section 5.

Ø Registration can be revoked u/s 7.

Registration and obligation of real estate

Ø As per RERA it now mandatory that real estate agents selling the premises in Real estate project have to register u/s9 by complying as per the form ‘G’ prescribed under Rule 11(2)

Ø As per Rule 12(4) the registration shall be valid for period of 5years.

Ø The provision for renewal in respect of Real estate agent should not be done as per Rule 13.

Ø There are various obligation caused on Real estate agent under Rule 14

Ø Revocation of registration of breach of provision mentioned in Rule15.

Ø As per the Rule 16 Real estate agents has to maintain and preserves separate books, accounts, documents. 70% of realization from allottees in a separate bank account

1.    The Act mandates that a promoter shall deposit 70% of the amount realized from the allottees, from time to time, in a separate account to be maintained in a scheduled bank. This is intended to cover the cost of construction and the land cost and the amount deposited shall be used only for the concerned project.

2.    The promoter shall be entitled to withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project. However, such withdrawal can only be made after it is certified by an engineer, an architect and chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project

3.    The promoter is also required to get his accounts audited within six months after the end of every financial year by a practicing chartered accountant. , Further, he is required to produce a statement of accounts duly certified and signed by such chartered accountant, and it shall be verified during the audit that (i) the amounts collected for a particular project have been utilised for the project; and (ii) the withdrawal has been in compliance with the proportion to the percentage of completion of the project.

The application for registration must disclose the following information:

Ø Details of the promoter (such as its registered address, type of enterprise such proprietorship, societies, partnership, companies, competent authority)’.

Ø A brief detail of the projects launched by the promoter, in the past five years, whether already completed or being developed, as the case may be, including the current status of the projects, any delay in its completion, details of cases pending, details of type of land and payments pending.

Ø An authenticated copy of the approval and commencement certificate received from the competent authority and where the project is proposed to be developed in phases, an authenticated copy of the approval and commencement certificate of each of such phases.

Ø The sanctioned plan, layout plan and specifications of the project, plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof and the locational details of the project.

Ø Performa of the allotment letter, agreement for sale and conveyance deed proposed to be signed with the allottees.

Ø Number, type and carpet area of the apartments and the number and areas of garages for sale in the project.

Ø The names and addresses of the promoter's real estate agents, if any, and contractors, architects, structural engineers affiliated with the project.

A declaration by the promoter supported by an affidavit stating that:

Ø He has a legal title to the land, free from all encumbrances, and in case there is an encumbrance, then details of such encumbrances on the land including any right, title, interest or name of any party in or over such land along with the details;

Ø The time period within which he undertakes to complete the project or the phase; and

Ø 70% of the amounts 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.

DUTIES OF PROMOTER

Ø Upon receiving the login id and password Promoter has to create his web page on the website of the authority

Ø To enter all the details of the proceed project on his web page

Ø Once in three months the promoter has to update the data on web page in respect of booking status, approvals, status of the project etc..

Ø Advertising material should reflect should the registration details of the promoter.

Ø Promoter has to abide by all the obligation under section 11(3) at time of time of booking

Ø As per the section 12 promoters will solely responsible for on regards as the advertisement of prospectus.

Ø As per section 13 promoter cannot accept more than 10% of the cost of apartment without executing the contract.(in MOFA it is used to be 20 %)

Ø As per section 15 promoters cannot transfer the Real estate project to the third party without obtaining the consent 2/3rd of the allotters.

Ø  As per section 16 promoters has to insure Real estate projects in respect of land and building and construction of Real Estate project.

Ø As per s.17 promoter has to transfer the title when the norms are fulfilled for its transfer.(this done with help of amendment of land titling bill 2010 which gives the entire mechanism of land titling

 BENEFITS OF THE CUSTOMER

The Authority shall in order to facilitate the growth and promotion of a healthy, transparent, efficient and competitive real estate sector make recommendations to the appropriate Government of the competent authority, as the case may be, on,—

(a) protection of interest of the allottees, promoter and real estate agent;

(b) creation of a single window system for ensuring time bound project approvals and clearances for timely completion of the project;

(c) creation of a transparent and robust grievance redressal mechanism against acts of ommission and commission of competent authorities and their officials;

(d) measures to encourage investment in the real estate sector including measures to increase financial assistance to affordable housing segment;

(e) measures to encourage construction of environmentally sustainable and affordable housing, promoting standardisation and use of appropriate construction materials, fixtures, fittings and construction techniques;

(f) measures to encourage grading of projects on various parameters of development including grading of promoters;

 (g) measures to facilitate amicable conciliation of disputes between the promoters and the allottees through dispute settlement forums set up by the consumer or promoter

associations;

(h) measures to facilitate digitization of land records and system towards conclusive property titles with title guarantee;

(i) to render advice to the appropriate Government in matters relating to the development of real estate sector;

(j) any other issue that the Authority may think necessary for the promotion of the real estate sector.

CIVIL COMPLAINT

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

 (1) No court shall take cognizance of any offence punishable under this Act or the rules or regulations made there under save on a complaint in writing made by the Authority or by any officer of the Authority duly authorised by it for this purpose.

(2) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act.

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How to Apply for a New GST Registration

If you are a regular dealer or a composite tax payer, you need to do the following for GST registration:

1.    Fill Part-A of Form GST REG-01. Provide your PAN, mobile number, and E-mail ID, and submit the form.

2.    The PAN is verified on the GST Portal. Mobile number, and E-mail ID are verified with a one-time password (OTP).

3.    You will receive an application reference number on your mobile and via E-mail.

4.    Fill Part- B of Form GST REG-01 and specify the application reference number you received. Attach other required documents and submit the form. Following is the list of documents to be uploaded –

5.    Photographs: Photographs of proprietor, partners, managing trustee, committee etc. and authorized signatory

6.    Constitution of taxpayer : Partnership deed, registration certificate or other proof of constitution

7.    Proof of principal / additional place of business :

8.    For own premises – Any document in support of the ownership of the premises like latest property tax receipt or Municipal Khata copy or copy of electricity bill.

9.    For rented or leased premises – copy of rent / lease agreement along with owner’s (landlord) documents like latest property tax receipt or Municipal Khata copy or copy of electricity bill.

10.                       Bank account related proof : Scanned copy of the first page of bank pass book or bank statement

11.                       Authorization forms: For each authorized signatory, upload authorization copy or a copy of resolution of managing committee or board of directors in the prescribed format.

12.                       If additional information is required, Form GST REG-03 will be issued to you. You need to respond in Form GST REG-04 with required information within 7 working days from the date of receipt of Form GST REG-03.

13.                       If you have provided all required information via Form GST REG-01 or Form GST REG-04, a certificate of registration in Form GST REG-06 will be issued within 3 days from date of receipt of Form GST REG-01 or Form GST REG-04.

14.                       If the details submitted are not satisfactory, the registration application is rejected using Form GST REG-05

Casual Registration

A person who occasionally supplies goods and/or services in a territory where GST is applicable but he does not have a fixed place of business. Such a person will be treated as a casual taxable person as per GST.

Example: A person who has a place of business in Bangalore supplies taxable consulting services in Pune where he has no place of business would be treated as a casual taxable person in Pune.

Composition Dealer

This is an option available to small businesses and taxpayers having a turnover less than Rs. 50 lakhs. They can opt for Composition scheme where they will tax at a nominal rate of 1% or 2.50% (for manufacturers) CGST and SGST each (rates will be notified later).

They will be required to maintain much less detailed records and file only 1 quarterly return instead of three monthly returns. However, they cannot issue taxable invoices, i.e., collect tax from customers, but are required to pay the tax out of their own pocket. They cannot also claim any input tax credit.

Composition levy is available to only small businesses. It is not available to interstate sellers, e-commerce traders, and operators.

Applicability

GST will apply when turnover of the business exceeds Rs 20 lakhs (Limit is Rs 10 lakhs for the North Eastern States). [Earlier the limit was Rs 10lakhs and Rs 5lakhs for NE states.]

Migration to GST

All existing Central Excise and Service Tax assessees and VAT dealers will be migrated to GST. To migrate to GST, assessees would be provided a Provisional ID and Password by CBEC/State Commercial Tax Departments.

Provisional IDs would be issued to only those assessees who have a valid PAN associated with their registration. An assessee may not be provided a Provisional ID in the following cases:

1.    The PAN associated with the registration is not valid

2.    The PAN is registered with a State Tax authority and Provisional ID has been supplied by the said State Tax authority.

3.    There are multiple CE/ST registrations on the same PAN in a State. In this case, only 1 Provisional ID would be issued for the 1st registration in the alphabetical order provided any of the above 2 conditions are not met.

The assessees need to use this Provisional ID and Password to login to the GST Common Portal (https://www.gst.gov.in) where they would be required to fill and submit the Form 20 along with necessary supporting documents.

Penalties for Not Registering Under GST

An offender not paying tax or making short payments has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000. The penalty will be high at 100% of the tax amount when the offender has evaded i.e., where there is a deliberate fraud.

However, for other genuine errors, the penalty is 10% of the tax due.

Multiple Registrations Under GST

A person with multiple business verticals in a state may obtain a separate registration for each business vertical.

PAN is mandatory to apply for GST registration (except for a non-resident person who can get GST registration on the basis of other documents).

A registration which has been rejected under CGST Act/SGST Act shall also stand rejected for the purpose of SGST/CGST act.

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Composition Scheme Rules under GST

Composition Scheme Rules under GST provide for all the procedural compliance w.r.t. intimation for Composition Scheme, effective date for levy, conditions and restrictions on levy, validity of levy and rate of tax.

The current state indirect tax regime has provided a simpler compliance for small dealers known as the Composition Scheme. Under this scheme you,

• Pay taxes only at a certain percentage of turnover
• File periodic returns only (usually on a quarterly basis)
• Have an option of not having to maintain detailed records or follow tax invoicing rules
• Are not allowed to take Input Tax Credit (ITC)
• Are not allowed to collect tax on sales

A. Intimation and Effective date for Composition Levy

1.   For persons already registered under pre-GST regime

Any person being granted registration on a provisional basis (registered under VAT Act, Service Tax, Central Excise laws etc) and who opts for Composition Levy shall file an intimation in FORM GST CMP-01, duly signed, before or within 30 days of appointed date. If intimation is filed after the appointed day, the registered person:

a) Will not collect taxes

b) Issue bill of supply for supplies

FORM GST CMP- 03 must also be filed within 60 days of exercise of option:

a) Details of stock

b) Inward supply of goods received from unregistered persons held by him on the date preceding the day of exercise of option.

2. For persons who applied for fresh register under GST to opt scheme

For fresh registration under the scheme, intimation in FORM GST REG- 01 must be filed.

3. Registered under GST and person switches to Composition Scheme

Every registered person under GST and opts to pay taxes under Composition Scheme, must follow the following:

a) Intimation in FORM GST CMP- 02 for exercise option

b) Statement in FORM GST ITC- 3 for details of ITC relating to inputs lying in stock, inputs contained in semi-finished or finished goods within 60 days of commencement of the relevant financial year

b. Conditions for a Composite Tax Payer

Apart from the threshold limit, the following conditions are applicable for a composite tax payer:

• Cannot be engaged in supply of services, other than supply of food or drinks for human consumption
• Cannot be engaged in manufacture of specific notified goods
• Cannot supply goods not taxable under GST
• Cannot supply goods through an e-commerce operator
• No Interstate outward supplies – A composite tax payer should not engage in interstate outward supply of goods and / or services .
• Payment of composition tax – If the composite tax payer is in the trade of supplying goods and services, then composition levy will be applicable for both supply of goods and supply of services.
• Does not have to collect tax – The composite tax payer does not have to collect tax on all his outward supply of goods and / or services.
• Applicable for all business verticals under the same PAN – Composition levy will be applicable for all business verticals operating within state or interstate under the same pan.
• What does this mean?
• An individual with different business verticals, like:
• Mobiles & Accessories
• Stationery
• Franchisee

In the above scenario, the composition scheme will be applicable for all three business verticals. The dealer cannot opt for any one business vertical to fall under the composition scheme. For example, if the business vertical’s place of business is in Karnataka & Kerala for a single PAN, each of the business vertical in that particular state should have only ‘Intra-State(within state)’ supplies.

• Cannot claim Input Tax Credit – The composite tax payer is not eligible to claim input tax credit on all his inward supply of goods and / or services.
• What does this mean?
• If a dealer chooses to be a composite tax payer, he cannot claim input tax credit even if he makes taxable purchases from a regular taxable dealer. Ideally, the taxable amount would be added to the composite tax payer’s cost.
• Conclusion

Any person who opts for the scheme will be deemed to have been opted for all the places of business having the same registered PAN. Hence, you may not choose any one of all the place of business to be registered under scheme.

Composition Scheme Rules under GST have been targeted to be strict and crisp for the persons availing the Composition Scheme.

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.

We have a team of highly qualified professionals and time to time training is provided by us as per the requirements. Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.

Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

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WHAT IS MLM OR MULTI LEVEL MARKETING

MLM or Multi level Marketing is an alternate form of distributing products and services. Instead of using the traditional distribution channel (distributors – retailers- consumers), MLM companies sell their products and services directly to consumers. That’s why it’s also called Direct Selling. When these consumers or customers like these products and services naturally they start sharing it with others.

MLM companies pay you when people buy their products and services from your recommendation. But the awesomeness doesn’t stop there, you are given an option to build a team of distributors (generally consisting of happy consumers recommended by you and those you recommend and those they recommend and so on.) contrary to common misconception< you are not paid to recruit people, you are paid depending on the total sales volume generate from your entire team. Instead of spending money on advertisement, MLM companies reward their consumers and distributors for their word- of- mouth advertisement efforts.

To regulate the sale of goods and services outside of retail establishments otherwise known as "Direct Selling (Multi Level Marketing)" and to provide for protection of consumers who purchase goods and services from direct sellers, following guidelines are issued with the approval of the Competent Authority. These guidelines will come into force from the date of publication in official Gazette and will remain in force till an appropriate legislation is enacted for the said purpose:

1. Definitions:-

1.    Direct Selling : Means marketing or sales of goods directly to the end user consumer using word of mouth publicity, display and/or demonstrations of the goods/products, and/or distribution of pamphlets. Explanation: Companies can open pick up points and delivery points for maintaining effective delivery system.

2.    Direct Selling Entity: Means a business entity as recognized by law for the time being in force including but not limited to a Company duly incorporated under the Indian Companies Act, a registered Partnership Firm constituted under the Indian Partnership Act.

3.    Direct Seller: Means a person who is authorized by the Direct Selling Entity to engage into the business of Direct Selling.

4.    Consumer: An individual who buys goods or services for personal use and not for manufacture or resale and shall have the same meaning as provided under the Consumer Protection Act. 1986.

5.    Goods/products: Goods/Products shall have the same meaning as defined in the Sale of Goods Act and section 3(26) of the General Clauses Act, 1897, that is, it shall include every kind of movable property other than actionable claims and money.

6.    Sales Incentive: Sale incentive means share of profit payable to the Direct Seller for effecting sale of goods/products as stipulated in the contract between the Direct Seller and the Direct Selling Entity.

Ø What is the law for setting up Multi Level Marketing Company India?

There is no separate law for setting up a Multi Level Network Marketing (MLM) in India by now it was proposed in Indian Parliament in 2005 but not yet passed as a law, however there are certain acts of Indian constitutions which we need to consider before setting up Multi Level Marketing Company:

• It should not be a only head count commission Model which falls in Pyramid Scheme which is banned in India, covers MRTP Act alias Money Rotation Trade Practice Banning ACT 1969.

• It should not be only money involved investment return format which falls in PCMC Act alias Prize Chit and Money Circulation banning Act 1978. It should be feasible Product selling Business Model.

What is the best practice to setup a Multi Level Marketing Company?

Essentials of setting up a MLM ENTITY Private Limited or Limited Company are to be setup. In India Multi Level Marketing Company involves limited risk for directors who are setting up a Multi Level Marketing Company Business.

Pertain IDSA (Indian Direct Selling Association) Membership. It’s not a government body but it’s a private setup by Amway India and other big network marketing companies which is trying to govern the whole Direct Selling Companies in India which prevents unethical and illegal MLM companies and Multi Level Network marketing Business practices to operate and destroy the MLM Business route.

Apply for Vat/Service Tax/ Tan No and all necessary license and registration required for manufacturer and product seller. Last but not the least Appoint a Legal Advisor, Consultant and a Chartered Accountant to create rules and regulation forms, manage paper works and other company related legal documents and stationary materials.

Please does not cut copy paste other company’s print materials as it may not be applicable on your product or MLM Business Model? It is also desirable to develop exclusive website content and information related to company written by legal advisor of the company to counter legal laws of the Land.

2. Conditions for Permissible Direct Selling:-

1.    Should be a Direct Selling Entity, having sales tax/Vat, Income Tax, TDS and other license as may be required as per the law/regulations of its principle place of business.

2.    Should have bank account with at least one nationalized bank.

3.    Partnership Deed or Memorandum of Association should clearly state their nature of business. (Those who do not have such specific clauses should get their memorandum of Association or Partnership Deed, as the case may be, amended within 2 months from the date of publication of these Guidelines).

4.    Pay sales incentive at the agreed rate within the agreed period.

5.    Shall display names and Identification numbers of their authorized Direct Sellers in the official websites.

6.    Should have a consumer grievance cell that should ensure redressal of consumer grievances within 7 days from the date of making such complaints.

7.    Website should provide space for registering consumer complaints hassle free.

3. Appointments/Authorisations:-

1.    Direct Selling Entity shall appoint/authorise Direct Sellers upon receipt and scrutiny of application in a prescribed format.

2.    An agreement recording terms of such appointment should be executed between the Direct Selling Entity and Direct Seller.

3.    No application should be considered unless such applicant is eligible to enter into a contract under the Indian Contract Act.

4.    Each Direct Seller shall be allotted Unique Identification Numbers before granting license/permission to start direct selling.

5.    Direct Selling Entity should not give incentive to any persons for joining of Direct Sellers.

4. Prohibition:-

1.    Payment of incentive by whatever name it is called unrelated to their respective sales volume.

2.    Supply/Distribution of goods with the knowledge that such goods/products are inferior or exceeded its validity period as per the manufacturer.

3.    Direct Selling Entity/Direct Seller will not indulge in money circulation scheme or any act barred by the Prize Chits and Money Circulation Scheme (Banning) Act, I978.

5. General Conditions:-

1.    MRP of the goods should be visibly displayed on the package.

2.    Accounts of individual Direct Sellers shall be maintained properly and should be made available through World Wide Web.

3.    Sales incentive should be distributed to the respective Seller on or before the agreed due dates.

4.    Goods sold by the Direct Selling entity should carry guarantee/warranty of the manufacturer. However consumer should be given opportunity to exchange/return the goods if he finds any manufacturing defect or the product purchased is not useful for the purpose it was meant, within 30 days from the date of purchase, provided any seal/protection on the product is kept unbroken.

6. Information Readiness (Ready Information file):-

1.    Every Direct Selling Company should maintain a file with all relevant documents that include:

2.    Certificate issued by Registrar of Companies, MOA and MOM.

3.    Xerox copies of TIN, DIN of Directors, TAN, PAN.

4.    Certificate of Sales Tax, Service Tax, CST Registrations.

5.    Copies of all Sales Tax Returns filed with the authorities.

6.    Copies of Service Tax Returns filed with the authorities.

7.    Copies of IT Returns of company filed with the authorities.

8.    TDS Statements of Distributors and respective challans paid.

9.    Every Direct Selling Company should maintain KYC/KYDS (Know Your Customer/Know Your Direct Sellers) as a mandatory process. Specific formats are to be provided on their websites to be available for all at any time.

7. Grievance Redressal Mechanism:-

1.    Every Direct Selling Company must have a complaint redressal mechanism to address any problem of their customers/Direct Sellers.

8. Breach of Guidelines:-

1.    The sale activities not following the above guidelines shall not be considered as Direct Selling and would be dealt appropriately under relevant provisions of existing laws.

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.

We have a team of highly qualified professionals and time to time training is provided by us as per the requirements. Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.

Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

Contact at parascs@gmail.com or refer website www.pnjlegal.com