For the 13 key functions
applicable to the real estate & hospitality industry In India, 82
statutory Acts are applicable, as summarised below.
· 48 Statutory Acts
are directly applicable (included in Annex 8 of the handbook)
· 34 Acts are
indirectly applicable through supporting functions like corporate finance,
Corporate Services, HR, etc. (included in Annex 9 of the handbook)
Further local
regulations, as below, are also applicable & Architects can add more.
· Urban planning
and development related
· Town and country
planning laws.
Further, for all
13 functions, eight types of statutory processes having 113 key statutory
activities have been identified as applicable in the Indian context.
These 113
activities are listed vis a vis the following statutory Acts in annex 21B in the
handbook
· The
RERA-Real Estate (Regulation & Development) Act 2016
· The building
& other construction workers (regulation of employment &conditions of
service) Act 1996
·
The income tax Act,1961
·
The SEZ Act 2005 &SEZ rules 2006
· The foreign
exchange management act,1999(FEMA)
·
The Goods and service tax Act,2017
·
The Companies Act,2013
· The SEBI Act
1992 (clause 49)’ SEBI listing regulations 2015
·
The payment of wages Act,1936
·
The minimum wages Act, 1948
·
The PF miscellaneous provisions Act 1952
· The employee
state insurance (ESI) Act,1948 & (amendment) 1989
· The Contract
labor (regulation)and abolition Act,1970
· The Payment
of Bonus Act,1965
·
The Maternity Benefit Act,1961
· The
apprenticeship Act 1961
· The employment
exchange Act 1959
For Design of Architect functions, five types of
statutory activities (out of 8) are relevant, having 37
key activities (out of 113) to be performed, as summarised below.
·
Meeting RERA Compliances =4
·
Meeting statutory regulations and taxation obligations =2
·
Obtaining Licenses, approvals, and maintaining statutory records
w.r.t Statutory Acts =24
·
Complying with IGST matters =4
·
Deducting Income tax on services-TDS =3
The list of 37
activities mentioned above is given in chapter 1 of
the book along with codes and narrated in annex 21B
It is pertinent
to note that the Central Government /statutory authorities, at their
discretion, may amend the applicability of statutory laws or various sections
as mentioned in this blog. Therefore, the applicable sections are to be read as
amended from time to time.
Given below is
the list of 18 activities that can adversely impact business is
as below (if these are performed without proper diligence or are unethical)
Statutory Process 1: Meeting RERA Compliances
related = four key activities that can adversely impact organisation
· Commence construction without
obtaining sanction plan approvals from competent authorities
· Obtain “certificate for adherence to
statutory/approved sanctioned plans and project specifications and National
Building code” through unfair means in case actual construction does not comply
with sanctioned plans
· Submit inaccurate deed of declaration
tabulating unit-wise areas constructed and bribing statutory agencies
· Bribe statutory agencies for obtaining
a “completion certificate” even before construction is complete by duping
customers and realizing payments through construction areas not yet ready for
possession.
Statutory Process 2: Meeting statutory regulations
and tax obligations and filing various key returns on the scheduled time = 4
key activities that can adversely impact organisation
·
Publish
inaccurately on the website project details vis-à-vis units booked, units
under construction, list of approvals taken and pending, and the status of the
project as prescribed in the RERA-Real Estate (Regulation and Development) Act
2016
· Inaccurate capture of details
vis-à-vis summary return of outward and inward supplies and
services along with payment of tax compliance in respect of The Central Goods
and Service Tax Act,2017.
· File returns inaccurately
· File returns non-timely
Statutory Process 3: Obtaining Licenses, approvals,
and maintaining statutory records w.r.t Acts = four key activities that can
adversely impact organisation
·
Commence and Continue construction without obtaining approvals/renewals as one or more
· Not complying with prescribed statutory
procedures and bribing Statutory officials to obtain such licenses
/approvals.
· Bribe the statutory inspectors during
their visits to the construction site to validate those constructions conforms
to statutory approvals
·
Not maintain or
maintain and submit inaccurate statutory records and bribe visiting Statutory
officials.
Statutory Process 4: Complying with IGST matters = five
key activities that can adversely impact organisation
· Maintain record
vis-à-vis inward or outward supply of local architectural services or inward
supply of BOQ sample materials procured which are either incomplete or
incorrect vis-à-vis amounts chargeable to GST or rate of GST or both
· Maintain incomplete
or incorrect records vis-à-vis inward supply of overseas consultant
services or inward imported supply of BOQ sample materials procured from
vendors
· Not comply with
requirements w. r. t. GST payable, collected, paid, and ITC availed under GST
rules for local consultants.
In case of overseas consultancy services
received, incorrect computation of chargeable gross invoice amount on which GST
is applicable (based on the availability or non-availability of PAN with
overseas consultant entity and overseas consultant’s annual billing amount to
us as a client).
· Not-Comply with
requirements w. r. t maintaining details of suppliers and customers with their
GSTN registration number
· File required
returns non-timely vis-à-vis applicable sections of the Act
Statutory Process 5: Deducting TDS-services=1 key
activity that can adversely impact organisation
· Deduction of TDS (Tax deduction at
source as per Income Tax Act,1961) at a rate different than
prescribed.
Handbook of the author
You can read more about the 18 key activities that can adversely impact
business in Chapter 1 of my handbook, “ETHICS in the real estate
and hospitality industry, Volume 1- Architectural, Interior design, and MEP
services.”