In Mumbai, many building are becoming older than 35 to 40 years and such building require redevelopment. Also due to shortage of land, rising population innovative concept of redevelopment of old properties has brought in Mumbai. In such redevelopment, society appoints developer and developer construct new flats with modern amenities. Members of society gets newly constructed flat free of cost and also get rent allowances, corpus and other allowances. Accordingly such redevelopment transaction is barter transaction between society/ members and developer.
Prior to 1st July, 2012, The Central Board of Excise and Customs (CBEC), vide their circular has clarified that re-construction undertaken by a building society by directly engaging a builder/developer will not be chargeable to Service tax as it is meant for the personal use of the society/its members.
However, from 1st July, 2012, In new service tax legislation, if any activity carried out by a person for another for consideration and includes a declared service but not falling in negative list of service then such activity would be liable for service tax. In case of redevelopment, developer provides service of construction of flat and developer receives right for construction of additional saleable area which developer can sale to third party. In such case, such reconstruction activity provided by developer to society members would fulfill criteria of definition of service. Hence, such construction service provided by developer to society members and members receives free of cost area would be liable for service tax.
The Maharashtra Chamber of Housing Industry (MCHI) has sought clarification from the Service Tax Commissioner, Mumbai-I on the issue whether Builders/Developers are liable to Service tax in respect of rehab flats/units allotted to society members in redevelopment project. The Commissioner, vide his letter F.No.V/ST-I/Tech-II/463/11 dated 31-08-2012, clarified that Service tax is leviable on construction of such rehab flats/units/ free of cost area received by members.
In such case, developers have to pay service tax @ 4.944% on execution of development agreement with society for redevelopment of building. The value of development rights which is consideration received in kind by builder for construction of flats to members should be taken at stamp duty valuation. Such value would be liable to service tax @ 4.944% of value of development rights.
Delhi is more dense and safe to live then New York: Report
India’s capital Delhi is one of the most prominent city to live, earn and spend less on public transport and feel safer, states a research report prepared by London School of Economics and Deutsche Bank’s Alfred Herrhausen Society. Delhi has scored better over cities such as New York and London and other major cities in their study.
Delhi has high average density of built up area, nearly twice the levels of wider New York metro area despite the Indian capital’s relatively low-rise urban landscape, a research report prepared by London School of Economics has said.
“Comparing Delhi’s urban dynamics to the eight other Urban Age cities – London, Bogota, Lagos, Tokyo, New York, Istanbul and Berlin- highlights that despite the capital’s relatively low-rise urban landscape, it has an extremely high average density of built up area of 19,698 people per square kilometre.
“This is nearly twice the levels for wider New York metro area (which at 11,531 people/sq km includes high-rise Manhattan), the research report which was released today said.
The report also said Delhi scores well in having a very low level of violent crime measured by the murder rate (homicides per 100,000 people), than New York and Istanbul.
The research has been carried out in preparation of the two-day conference on Urban Age ‘Governing Urban Futures’ which started here today.
The conference is being organised by ‘LSE Cities’ at the London School of Economics and Political Science and Deutsche Bank’s Alfred Herrhausen Society in partnership with the National Institute of Urban Affairs (NIUA).
Speaking on the occasion, Deutsche Bank AG Co-Chief Executive Anshu Jain said, “Today, cities account for 2 per cent of the world’s landmass but produce 80 per of global wealth. Over the next 30 years, one third of the world’s economic growth will be generated in the top 100 cities.
Quoting the McKinney Global Institute report, Jain said, “India needs to build the equivalent of a new Chicago every year for the next few decades to sustain its growth.”
“That’s why the Indian government’s ’100 Smart Cities’ initiative is so important,” he added