Builders’ Association of India - BAI Report 2016-2017.pdfBuilders’ Association of India ... 6th November 2016 at 4.00 (Minutes have already been circulated Journal, December 2016

Builders’ Association of India(All India Association of Engineering Construction Contractors & Builders)

Registered & Head Office:G-1/G-20, Commerce Centre, J. Dadajee Road,

Tardeo, Mumbai Tel : (022) 23514134, 23514802, 23520507

Fax : 022-23521328E-mail : [email protected]

Annual Report and Accounts

www.baionline.in


Registered & Head Office: 20, Commerce Centre, J. Dadajee Road,

Mumbai – 400 034 Tel : (022) 23514134, 23514802, 23520507

23521328 mail : [email protected]

Delhi Office:D1/203, Aashirwad Complex

Green Park Main, New Delhi M : 09555448763

Telefax: (011) 26568763E-mail: [email protected]

ESTD. 1941

76th


2016–2017

www.baionline.in

Builders’ Association of India (All India Association of Engineering Construction Contractors & Builders)

Delhi Office: D1/203, Aashirwad Complex

Green Park Main, New Delhi – 110 016 09555448763

Telefax: (011) 26568763 [email protected]


www.baionline.in

Estd. 1941

Builders’ Association of G-

The Seventy Sixth (76) Annual General Meeting of the Members of Builders’ Association of India, will be held on Saturday 22nd

Hyderabad. to transact the following business : 1. To confirm the Minutes of the Seventy

2016 at 4.00 P.M. at Hotel Express Inn, Members and also printed in Indian Construction 66 and also hosted on BAI website www.baionline.in

2. To confirm the Minutes of the Special General Meeting held on SundayP.M. at ITC Grand Chola, Guindy, Chennai

also printed in Indian Construction

hosted on BAI website www.baionline.in

3. To take note of the result of BAI Or

4. To take note of the result of BAI Trustee

5. To consider, and if thought fit, adopt the Annual Report of the Association for the year ending 31st March 2017.

6. To consider, and if thought fit, adopt the Audited Balance Sheet and Income & Expenditure Account of the Association for the year ending 31st

7. To appoint Auditors to audit the accounts of the Assocremuneration.

8. To consider, any other item, with the permission of the chair.

Place : Mumbai Dated: July 1, 2017 Note: (i) Queries on Accounts and Reports should be communicated to BAI

Headquarter on or before

to kindly circulate this information amongst their members. Please note no

floor queries on accounts will be entertained.

(ii) Please bring this copy of Annual Report.

Delhi Office: D1/203, Aashirwad Complex, Green Park Main, New Delhi 110 016

Builders’ Association of (All-India Association of Engineering Construction Contractors & Builders)

-1/G-20, 7th Floor, Commerce Centre, J. Dadajee Road, Tardeo, Mumbai Tel: 91-22 23514134 , 23520507, 23514802 Fax: 23521328

Web Site : www.baionline.in E-mail:

N O T I C E

) Annual General Meeting of the Members of Builders’ Association of India, nd July, 2017 at 4.00 P.M. at Hotel Novotel, Hyderabad Airport,

to transact the following business :-

onfirm the Minutes of the Seventy Fifth Annual General Meeting held on 4.00 P.M. at Hotel Express Inn, Nashik. (Minutes have already been circulated to and also printed in Indian Construction Journal, September 2016 issue

and also hosted on BAI website www.baionline.in).

onfirm the Minutes of the Special General Meeting held on Sunday, 6th November 2016 at 4.00 Grand Chola, Guindy, Chennai (Minutes have already been circulated

also printed in Indian Construction Journal, December 2016 issue – Page no.85

hosted on BAI website www.baionline.in).

To take note of the result of BAI Organisational Election for the year 201

To take note of the result of BAI Trustee South Zone Election for the year 2017

To consider, and if thought fit, adopt the Annual Report of the Association for the year ending

To consider, and if thought fit, adopt the Audited Balance Sheet and Income & Expenditure Account of the Association for the year ending 31st March 2017.

To appoint Auditors to audit the accounts of the Association for the year 2017

To consider, any other item, with the permission of the chair.

HBUILDERS’

Queries on Accounts and Reports should be communicated to BAI

Headquarter on or before 15th July 2017. Centres Chairmen are requested


floor queries on accounts will be entertained.

Please bring this copy of Annual Report.

D1/203, Aashirwad Complex, Green Park Main, New Delhi 110 016 & 26568763 E-

Builders’ Association of India India Association of Engineering Construction Contractors & Builders)

Floor, Commerce Centre, J. Dadajee Road, Tardeo, Mumbai – 400034 22 23514134 , 23520507, 23514802 Fax: 23521328

ail: [email protected]

) Annual General Meeting of the Members of Builders’ Association of India, l, Hyderabad Airport,

Annual General Meeting held on Saturday, 2nd July (Minutes have already been circulated to

, September 2016 issue – Page no.64 to

6th November 2016 at 4.00 (Minutes have already been circulated to Members and

Page no.85 to 91 and also

ional Election for the year 2017-18 (Enclosed).

Zone Election for the year 2017-19 (Enclosed).

To consider, and if thought fit, adopt the Annual Report of the Association for the year ending

To consider, and if thought fit, adopt the Audited Balance Sheet and Income & Expenditure

iation for the year 2017-18 and fix their

C. G. DEOCHAKE

HON. GEN. SECRETARY ASSOCIATION OF INDIA

Queries on Accounts and Reports should be communicated to BAI

Centres Chairmen are requested


-mail: [email protected]

Estd. 1941

BUILDERS’ ASSOCIATION OF INDIA MANAGING COMMITTEE 2016-2017

President Mr. Avinash M. Patil

Vice Presidents

Mr. Mu. Moahan Mr. R. N. Gupta Dr. Rajiv B. Krishnani Mr. Ravindra Pradhan

Hon. Gen. Secretary Hon. Gen. Treasurer Mr. C. G. Deochake Mr. Neerav Parmar

Imm. Past President Mr. Lal Chand Sharma

State Chairman - Andhra Pradesh State Chairman - Chhattisgarh Mr. CH Ramakotaiah Mr. Alok Shivhare

State Chairman - Gujarat State Chairman - Jharkhand Mr. Nitin M. Shah Mr. Devendra Tiwary

State Chairman - Karnataka State Chairman - Kerala Mr. K. S. Someshwara Reddy Mr. John Paul K.

State Chairman - Maharashtra State Chairman - Tamil Nadu Mr. Suresh B. Patil Mr. M. Thirusangu

State Chairman - Telangana State Chairman - Uttar Pradesh Mr. B. Sugunakar Rao Mr. Sanjay Tyagi

State Co-ordinator - Assam State Co-ordinator - Madhya Pradesh Mr. Kulesh Goswami Mr. Suresh Vaswani

State Co-ordinator - Rajasthan State Co-ordinator - West Bengal Mr. Ravi Kumar Kheria Mr. Sudip Kumar Dutta

Members of the Managing Committee representing Centres

Mr. Amar Bawa Mr. Ashok Agarwal Mr. Bhopinder Lal

Mr. D. Kempanna Mr. G. Thilagar Mr. Harshad N. Bhayani

Mr. Jaiprakash Bhatia Mr. Jawahar Mutha Mr. K. Annamalai

Mr. K. Mathiyalagan Mr. L. Shantakumar Mr. Mahesh R. Mirani

Mr. M. Dhandavakrishnan Mr. Mathew Alex Vellapally Mr. Mohan S. Kataria

Mr. Mohinder Rijhwani Mr. Narendra P. Patel Mr. Naresh Kumar Agarwal

Mr. Neelkanth S. Joshi Mr. P. Parameswaran Mr. Prabir Kumar Mukherjee

Mr. Prince Joseph Mr. R. Ethirajan Mr. R. Krishnaswamy

Mr. S. Prakash Mr. S. Ramaprabhu Mr. Sanjay Laxman Patil

Mr. T. V. Chandrasekaran

Members of the Managing Committee representing Patron Members

Mr. A. Chamaraja Reddy Mr. A. Puhazhendi Mr. Abhay M. Garde

Mr. Baburao L. Shakkarwar Mr. Basavaraj S. Totad Dr. D. Thukkaram

Dr. Dharmesh C. Awasthi Mr. H.N. Vijaya Raghava Reddy Mr. Jagdish M. Parekh

Mr. K. J. George Mr. K. Ramanujam Mr. K. Subramani

Mr. L. Venkatesan Mr. M. G. Sundar Mr. Mohan D. Bhate

Mr. N. Ramalingam Mr. Narendra Kumar Mr. O. K. Selvaraj

Mr. P.P. John Mr. Pratap B. Salunkhe Mr. S. Ayyanathan

Mr. S. Ganapathi Mr. Srinivasa Reddy Dr. Tarro T. Manghnani

Mr. Y. Ishwar Rao

Members of the Managing Committee representing Affiliated Associations

Mr. Atul Vijaykant Moog Mr. E. Manohar

Mr. N. Velayutham Mr. R. R. Shridhar

Special Invitees

Mr. A.K. Srivastava Mr. A.N. Balaji Mr. Anthony Rathnam Mr. Arvindbhai V. Patel Mr. B. Adinarayana Reddy Mr. B. Babu Rao Mr. C.S. Parhar Mr. D.P. Balaji Mr. G.M. Ravindra Mr. H.V. Nagesh Mr. Harkant G. Vachharajani Mr. I. Nepolian Mr. J. Dhanasekar Mr. Jacob Mathew Vellapally Mr. Jaideep P. Raje Mr. Joshy Joseph Mr. K. Chinnaswamy Mr. K. Rajakumaran Nair Mr. K. Rajavel Mr. L.D. Kotwani Mr. M. Rajendran Mr. Mahesh G. Mahajan Mr. Manesh K. Mr. Milind T. Patil Mr. MVG Jawagar Mr. N.M. Krishnamurthy Mr. N.P. Vishwanath Mr. P. Shahin Mr. P.K.P. Narayanan Mr. Paresh Vachhani Mr. Praksh N. Dewalkar Mr. Pratap S. Rananaware Mr. R. Manohar Mr. R. Saravanan Mr. R. Sivakumar Mr. Rahul B. Vakharia Mr. Rajendra K. Mutha Mr. Rajendra M. Upadhye Mr. Ramdas R. Jagtap Mr. Ramesh P. Marda Mr. S. Pandiyen Mr. S.M. Sait Mr. S.R. Swamy Mr. Sanjay Shah Mr. Sharad D. Kharade (Patil) Mr. Stanley Scaria Mr. Sunil Kokitkar Mr. Suresh Moorjani Mr. Tarak R. Mamlatdarna Mr. Uday N. Gokhale Mr. V. Narasimhan Mr. V. Sivarajan Mr. V.L. Muniraja Mr. Vinit Patel

BUILDERS’ ASSOCIATION OF INDIA (All-India Association of Engineering Construction Contractors and Builders)

G-1/G-20, 7th floor, Commerce Centre, J. Dadajee Road, Tardeo, Mumbai 400034 Tel : (91-22) 23520507, 23514134, 23514802 Fax: 23521328

Web Site : www.baionline.in E-mail : [email protected]

Ref.: 607/M/2015-16 dated 30th

March 2016 TO:

THE TRUSTEES THE VICE-PRESIDENTS THE STATE CHAIRMEN / CENTRE CHAIRMEN THE MANAGING COMMITTEE AND THE GENERAL COUNCIL MEMBERS Dear Sirs,

The election process for 2016-17 of Builders’ Association of India has been completed on 30th March 2016. Following are the election results: - President : Shri Avinash M. Patil

[Nashik Centre]

Vice Presidents : 1. Shri Ravindra Pradhan

[Jharkhand (Ranchi) Centre] 2. Shri R.N. Gupta [Delhi Centre]

3. Shri Mu. Moahan

[Southern (Chennai) Centre] 4. Dr. Rajiv B. Krishnani [Pune Centre]

Hon. Gen. Secretary : Shri C.G. Deochake Hon. Gen. Treasurer : Shri Neerav Parmar State Chairman (Andhra Pradesh) : Shri CH Ramakotaiah (Visakhapatnam Centre) St. Co-ordinator (Assam) : Shri Kulesh Goswami (Guwahati Centre)

State Chairman (Chhattisgarh) : Shri Alok Shivhare (Durg-Bhilai Centre) State Chairman (Gujarat) : Shri Nitin M. Shah (Baroda Centre)

State Chairman (Jharkhand) : Shri Devendra Tiwary (Jharkhand (Ranchi) Centre) State Chairman (Karnataka) : Shri K.S.Someshwara Reddy (Karnataka (Bangalore

Centre)

State Chairman (Kerala) : Shri John Paul K (Kottayam Centre)

St. Co-ordinator (Madhya Pradesh) : Shri Suresh Vaswani (Bhopal Centre)

State Chairman (Maharashtra) : Shri Suresh B. Patil (Sangli Centre) St. Co-ordinator (Rajasthan) : Shri Ravi Kumar Kheria (Rajasthan (Jaipur) Centre) State Chairman (Tamil Nadu) : Shri M. Thirusangu (Tiruchirappalli Centre)

State Chairman (Telangana) : Shri B. Sugunakar Rao (Karimnagar Centre) State Chairman (Uttar Pradesh) : Shri Sanjay Tyagi (Muzaffarnagar Centre)

St. Co-ordinator (West Bengal) : Shri Sudip Kumar Dutta (Eastern (Kolkata) Centre

Members of the Managing Committee representing Centres:

1. Shri Amar Bawa 2. Shri Ashok Agarwal

3. Shri Bhopinder Lal 4. Shri D. Kempanna 5. Shri G. Thilagar 6. Shri Harshad N. Bhayani 7. Shri Jaiprakash Bhatia 8. Shri Jawahar Mutha 9. Shri K. Annamalai 10. Shri K. Mathiyalagan 11. Shri L. Shantakumar 12. Shri M. Dhandavakrishnan 13. Shri Mahesh R. Mirani 14. Shri Mathew Alex Vellapally 15. Shri Mohan S. Kataria 16. Shri Mohinder Rijhwani 17. Shri Narendra P. Patel 18. Shri Naresh Kumar Agarwal 19. Shri Neelkanth S. Joshi 20. Shri P. Parameswaran 21. Shri Prabir Kumar Mukherjee 22. Shri Prince Joseph 23. Shri R. Ethirajan 24. Shri R. Krishnaswamy 25. Shri S. Prakash 26. Shri S. Ramaprabhu 27. Shri Sanjay Laxman Patil 28. Shri T.V. Chandrasekaran

Members of the Managing Committee representing Patron Members:

1. Dr. D. Thukkaram 2. Dr. Dharmesh C. Awasthi 3. Dr. Tarro T. Manghnani 4. Shri A. Chamaraja Reddy 5. Shri A. Puhazhendi 6. Shri Abhay M. Garde 7. Shri Baburao L. Shakkarwar 8. Shri Basavaraj S. Totad 9. Shri H.N. Vijaya Raghava Reddy 10. Shri Jagdish M. Parekh 11. Shri K. Ramanujam 12. Shri K. Subramani

13. Shri K.J. George 14. Shri L. Venkatesan

15. Shri M.G. Sundar 16. Shri Mohan D. Bhate 17. Shri N. Ramalingam 18. Shri Narendra Kumar 19. Shri O.K. Selvaraj 20. Shri P.P. John 21. Shri Pratap B. Salunkhe 22. Shri S. Ayyanathan 23. Shri S. Ganapathi 24. Shri Srinivasa Reddy 25. Shri Y. Ishwar Rao

Members of the Managing Committee representing Affiliated Associations:

1. Shri Atul Vijaykant Moog

3. Shri N. Velayutham

2. Shri E. Manohar

4. Shri R.R. Shridhar

The new office bearers will assume charge of their respective offices with effect from 1stApril 2016 for a period of 1 year as per the BAI Constitution.

Thanking you, Yours faithfully,

RAJU JOHN

RETURNING OFFICER BAI ORGANISATIONAL ELECTIONS 2016-17

Copy to: 1. Shri V.M. Fazal Ali

2. Shri J.R. Sethuramalingam 3. Shri A.B. Chitale

Board of Scrutineers, BAI Organisational Elections 2016-17

Estd. 1941

(AllG-1/G-20, 7th floor, Commerce Centre, J. Dadajee Road, Tardeo, Mumbai 400034

TO: THE TRUSTEES THE VICE-PRESIDENTS THE STATE CHAIRMEN / CTHE MANAGING COMMITTEE AND THE

Dear Sirs,

The election process for Trustee India for two year term i.e. 2017Result of the Election is as follows:

Shri K. Ramanujamand II for 2017-2019.

The new Trustee will assume charge with effect from 12 years as per the BAI Constitution.

Thanking you,

Copy to: (1) Shri V.M. Fazal Ali

(2) Dr. D. Thukkaram (3) Shri A.B. Chitale (4) All General Council Members Elect 2017

BUILDERS’ ASSOCIATION OF (All-India Association of Engineering Construction Contractors and Builders)

20, 7th floor, Commerce Centre, J. Dadajee Road, Tardeo, Mumbai 400034Tel : (91-22) 23520507, 23514134, 23514802 Fax: 23521328


Ref.: 555/M/2016-17 dated

CENTRE CHAIRMEN OMMITTEE AND THE GENERAL COUNCIL MEMBERS

The election process for Trustee – South Zone-I & II of Builders’ Association of India for two year term i.e. 2017-2019 has been completed on 30Result of the Election is as follows:--

Shri K. Ramanujam has been unanimously elected as Trustee

The new Trustee will assume charge with effect from 1st April 2017 for a perio2 years as per the BAI Constitution.

BAI TRUSTEES

(1) Shri V.M. Fazal Ali } (2) Dr. D. Thukkaram } Board of Scrutinisers. (3) Shri A.B. Chitale }

All General Council Members Elect 2017-18

SSOCIATION OF INDIA India Association of Engineering Construction Contractors and Builders)

20, 7th floor, Commerce Centre, J. Dadajee Road, Tardeo, Mumbai 400034 22) 23520507, 23514134, 23514802 Fax: 23521328

[email protected]

dated March 30, 2017

EMBERS

I & II of Builders’ Association of s been completed on 30th March 2017. The

Trustee – South Zone-I

April 2017 for a period of

Yours faithfully,

RAJU JOHN

RETURNING OFFICER RUSTEES ELECTIONS 2017-19

Report of the President and Managing Committee of

Builders' Association of India for the year 2016-17

Friends, The President and the Managing Committee have great pleasure in presenting the 76th Annual Report of the Association along with the Statement of Accounts and the Auditors’ Report for the year 2016-17. Abundant Opportunities

Infrastructure sector to provide impetus to construction activity On the back of the government’s renewed focus on infrastructure development, contractors are likely to witness a significant increase in construction opportunities. The government is expected to pump in more funds into the infrastructure sector, which is likely to attract private investment too. Roads, railways power, ports and airports are likely to be key growth drivers for the construction sector.Indian infrastructure looks at construction opportunities across various sectors. Roads and bridges Roads development has been a key focus area of the government. Big-ticket initiatives such as the launch of the hybrid annuity model (HAM) coupled with the approval of conducive policies to debottleneck the sector are expected to provide an impetus to construction activity. Besides this, the launch of an online marketplace for cement procurement (NAM PRO) is likely to give a further push to construction activity by focusing on the construction of concrete roads. Significant opportunities will also be offered through programmes such as Bharat nectivity project and Setu Bharatam. According to India Infrastructure Research, the road sector will offer a construction opportunity of over of Rs 7 trilion till 2022. As per research conducted, 710 projects spanning a length of over 58,000 km, spread across the national highway and state highway segment, are in the pipeline. The total investment likely to be mobilized by 2022 is expected to be at least Rs. 12 trillion. Contractors will have both indirect and direct opportunities since the government has stated its intent to award projects irrespective of the award mode. Hence, besides engineering, procurement and construction (EPC) projects, the public-private partnership (PPP) model could also slowly make a comeback. India Infrastructure Research complied an indicative list of upcoming projects at the nation level. Overall, 244 projects valued at over Rs. 4 trilion are in the pipeline. Going forward, the targets for 2016-17 are ambitious. The government aims to award 25,000 km and construct 15,000 km of road during the year. Overall, the national highway segment will offer project opportunities worth Rs. 1.5 trillion in the next year.

The National Highways Authority of India (NHAI) plans to award projects in a robust mix of EPC, build-operate-transfer (BOT) and HAM modes. Over 8,300 km of roads have been identified for development in the north eastern region by 2022, at an investment of at least Rs. 864 billion. At the state level, EPC opportunities look promising with Uttar Pradesh, Maharashtra and Bihar recomdelling big projects on an EPC basis instead of through PPs. New opportunities have also been showcased by states such as Telangana, Chhattisgarh, West Bengal and Odhish. Overall, the stte governments will spend over Rs. 7.4 trillion for the development of roads and bridges, which are expected to add a length of around 35,000 km. Power Power generation capacity along with the associated transmission and distribution network has increased manyfold over the years. The availability of funds plays a crucial role in meeting the capacity addition requirement. According to the Natinal Electricity Plan, 2016, power generation projects will witness a total capacity addition of 72,495 MW during the period 2017-22. Of this, 50,025 MC capacity will be added in coal and lignite-based power station, 4,340 MW in gas-based power stations, 15,330 MW in nuclear generation and 2800 MW in nuclear generation. Besides this, there has been a big push by the government for setting up renewable power generation capacity of 175000 MW by the year 2022, of which 115326 MW is expected to be set up during 2017-22 (59674 MW has already been set up). Based on the likely capacity addition for the period 2017-22, as well as year-wise expenditure phasing in the same period for advance action on projects coming up during 2022-27, the total fund requirement is estimated to be Rs. 10.33 trillion. The figure comprises Rs. 8.59 trillion for conventional power generation (72495 MW) and renewable energy addition (115326 MW), as well as Rs. 1.74 trillion for the advance action plan for 2022-27. Typically, construction works accounts for 65-70 per cent of the total project cost of a hydro power project. The construction component in thermal power accounts for about 40 per cent of the total project cost, while that in nuclear power plants is about 20 per cent. In contrast, renewable energy projects offer relatively meager construction opportunities. In terms of the pipeline of projects considered, construction opportunities to the tune of Rs. 2453.15 billion will be on offer in the power sector till 2022. Of this, opportunities worth Rs. 1400.7 billion will be in the thermal segment, Rs. 996.45 billion will be offered by hydro projects, and the remaining Rs. 56 billion worth of opportunities will be in the nuclear power segment.

Ports According of India Infrastructure Research, projects worth Rs. 356.91 billion related to the construction of berths and container terminals are on the anvil at existing ports. Of these, projects worth Rs. 74.75 billion are at the bidding stage, while projects worth Rs. 249.94 billion have been announced. Type-wse, brownfield projects entail an investment of around Rs. 197.7 billion in states such as Tamil Nadu, Kerala, Odisha and Gujarat. Sagamala, the flagwhip programme of the Ministry of Shipping, is expected to provide an impetus to the development of three major ports –at Vadhava, Maharashtra; Sagar, West Bengal and Colachel, Tamil Nadu. The Sagar port project involves the development of a deep-sea port at an investment of Rs. 120 billion. In October 2016, the central government approved a grant of Rs. 5.15 billion to make the project financially viable. Vadhavan port, entailing an investment of Rs. 92.97 billion for Phase I, will be able to handle 40-60 million tones 9mt) of cargo every year. The project will be developed by a joint venture of the Maharashtra Maritime Board and the Jawaharlal Nehru Port Trust. The Colachel port project involves an investment of Rs. 275.7 billion and will be implemented on a PPP basis. The Union cabinet gave in-principle approval for setting up a major port at Colchel in July 2016. In addition, new port projects, targeted to add over 370 mt of capacity, worth at least Rs. 779 billion are coming up across various states. Construction accounts for nearly 65 percent of the total project cost (rough estimate) of a port project, while the remaining comprises electrical and mechanical costs. The actual cost, however, depends on several factors, including the type of cargo facility (brownfield or greenfiled), project scope, location, etc. Assuming a construction component of 65 per cent. India Infrastructure Research has estimated a construction opportunity of Rs. 738.66 billion at existing a new ports by 2022. Railways Indian Railways (IR) aims to invest Rs. 8.56 trillion in new tracks, faster trains and station redevelopment by 2020 and, therefore, plans to increase debt to help fund this unprecedented modernization plan. To meet this objective, around Rs. 2.5 trillion ($37 billion) of debt is required till 2020. IR has prepared a prioritization plan where the focus is on longer loops, line doubling and electrification projects. Doubling projects on high-density routes are likely to get priority. The easing of foreign direct investment norms permitting overseas investments in high speed rail (HSR) development is a good sign for the sector. Some big-ticket projects such as the dedicated fright corridor (DFC), the Mumbai-Ahmedabad HSR, semi-HSR project, and station redevelopment and modernization have been undertaken to transform the railways sector. With an investment of over Rs. 800 billion, the DFC project is one of the biggest ongoing infrastructure project in the country.

Another focus area for IR is the development of HSR projects. The eight proposed HSR corridors of 4,215 km length translate into a financing requirement of over Rs. 421 billion. The first HSR in the country will run on the Mumbai-Ahmedabad section and will involve an investment of Rs. 980 billioln. Recently, in December 2016, the Japan International Cooperation Agency inked a tripartite consultancy pact with the Ministry of Railways (MoR) and the National High Speed Rail Corporation of India for the project. Besides, nine corridors, have been identified for the development of semi-HSR corridors in a phased manner involving the introduction of express trains running at 160 kmph. Additional expenditure will be incurred towards increasing speeds on select existing routes. Besides this, IR’s station redevelopment and modernization plan is likely to create huge construction opportunities. In July 2015, the central government approved IR’s proposal to offer A-1 and category stations (407 stations) for redevelopment. An expenditure of Rs 1 triion has been envisaged by IR for station redevelopment and logistics parks development by 2021-22. A $5 billion fund for the redevelopment of railway stations called the Railways of India Development Fund has been proposed by the MoR. Of this, the MoR will seek $500 million from the World Bank, $1 billion from the Ministry of Finance and the remaining from pension and sovereign funds, Japan has evinced interest in funding station redevelopment projects.

Airports In the aviation sector, the National Civil Aviation Policy, 2016 has been released and air traffic is once again on a growth path. India is projected to become the third largest aviation market by 2020, behind only China and the US. Although most metro airports do not have current expansion plans, there is abundant opportunity in Greenfield and existing Airports Authority of India (AAI) airports. According to India Infrastructure Research, there are 22 key airport projects in the pipeline. Of these, eight projects are likely to add a capcitiy of about 150 million passengers per annum (mppa). (The planned capacity addition figures of the other 14 are not available.) Of the 22 projects in the pipeline, 18 have an investment requirement of at least Rs. 547 billion (the cost of four projects is not available). Of this Rs. 547 billion, some portion is expected to be mobilized through AAI funds, as it plans to invest Rs. 83 billion in the next greefield works. Type-wise, over 62 mppa of capacity is likely to be added through eight brownfiled projects, followed by over 87 mppa through the development of new airports. With regards to project status, most of the projects have been announced. Another three are under bidding (such as Navi Mumbai airport), while the Mopa airport project has recently been awarded to GMR. (It has been considered as being in the pipeline for the purpose of this analysis despite being awarded because sub-contracting opportunities still exist).

State-wise, Andhra Pradesh and Maharashtra both have three upcoming projects, followed by two in Tamil Nadu, Other states that will witness airport development works are Gujarat, Karnataka, Madhya Pradesh, Punjab, Nagaland, Odisha, Telangana and Goa. On average, the share of construction in the total cost of an airport project pertaining to terminal expansion and construction is about 66 per cent; the construct ion share in works like aprons, runways, taxiways and allied works is 90 per cent; and in new air traffic contral towers it is 45 per cent. Given these assumptions, the airport sector represents a construction opportunity of Rs. 361.02 billion. It is difficult to ascertain the construction opportunity individually for brownfiled and greenfiled projects since AAI has laid out its capex plan based on the state of infrastructure only in cities where it has projects.

Urban Transport Civil construction has a huge share in the total cost of urban transport projects, especially metro and monorail projects. As cities increasingly come up with decongestion plans, the urban transport sector will continue to offer a lot of opportunity. As per India Infrastructure Research, bases on investments entailed by projects that are coming up (yet to be awarded) between 2017 and 2022, investments worth Rs. 3.36 trillion are in the pipeline for this sector. About 48 metro/light/mono rail projects are currently in the pipeline. These include greenfiled projects as well as extensions to currently operational network and cover a total length of about 1,828 km. of these, the maximum investment will be in the development of 37 metro rail projects. Most of the investment in these projects is likely to be mobilized by 2020-21. Of the total investment requirement of Rs. 3.63 trillion, over half (about Rs 2 trillion) will be for greenfiled urban transport projects, while the remaining will be invested in the expansion of existing metro/light/mono rail projects by 2022. The construction component of a metro/mono rail project based on the civil engineering works required accounts for about 50 per cent of the total project cost. Based on this estimate and the robust project pipeline, India infrastructure Research has estimated that the sector will provide a construction opportunity of about Rs. 1.82 trillion by 2022.

Water supply and waste management The water supply sector continues to receive significant central support in the form of appropriate policies, budgetary support as well as new programmes and schemes. At the central level, programmes such as the Atal Mission for Rejuvenation and Urabn Transformation, the Swachh Bharat Abhiyan and the Smart Cities Mission have been launched. Besides, state governments and local bodies are undertaking a number of water supply and sewerage projects to improve service delivery. These projects are expected to give a push to construction activates in the sector.

On the basis of projects tracked by India Infrastructure Research. It is estimated that an investment of over Rs. 540 billion is expected in 96 water supply and sanitation projects. Overall, projects in the pipeline are expected to create more than 5,200 million liters per day (mid) of additional treatment capacity. Most of the opportunity exists in the 86 greenfiled projects. In the waste management segment, 10 project have been announced entailing an investment of around Rs. 23.25 billion. These projects are coming up in states such as Gujarat, Andhra Pradesh, Maharashtra, Bihar and Rajasthan among other. Drinking water supply and waste water treatment projects have a construction component of 66 per cent. As per India Infrastructure Research, the water supply and waste management segments together will offer a construction opportunity of around Rs. 371.74 billion by 2022. In the next few years, prospects appears to be good for developers, contractors and technology providers. However, issues that restrict private participation and delay project implementation need to be addressed to maintain growth momentum in the construction sector. Scenario during XIIth Plan Period (2012-17) Vis–a - vis & Nationl Highway Development Project. During 2012-16, period Private Investment of Rs.75-63 billion was realized. However award of projects came down to 2552 K.M. compare to 11574 K.M. during 2012-16 given below in Table ‘A’, comparative statement of year wise award and completion of projects.

Table A

Fiscal Year

Project awarded in K.M.

Project completed

in K.M.

Project completed

In percentage

Award of

project on BOT in KM

Award of

project on

EPC in

K.M.

Project Awarded target in

K.M.

2005-2006

1608 753 47 - - -

2006-2007

1390 636 45 - - -

2007-2008

1146 1682 140 - - -

2008-2009

643 2205 390 - - -

2009-2010

3360 2893 80 - - -

2010-2011

5083 1784 35 - - -

2011-2012

6491 2249 35 6419 - -

2012-2013

1116 2844 250 1116 - 8100

2013-2014

1436 1901 140 223 1215 2844

2014-2015

7980 1600 100 732 2434 8500

2015-2016

10098 8217 - 8790 1360 3750

2016-2017

25000 15000 60 11250 3750 10000

Total 65351 41764 - 28530 8759 33194

For 2016-17 projections During 2014-15, N.H.A.I. did not receive any bid for 16 projects invited on BOT basis. Hence about 2300 k.m. out of total 3067 k.m. were awarded on E.P.C. basis. During the period January 2014 – June 2016, only 14 National Highway Projects were able to achieve financial closure. Out of 14 projects, seven projects achieve financial closure had debt component of 60.75% against earlier 75%, due to reluctance of banks. Some of the project that achieved financial closure had to be terminated and rewarded due to implementation issue. However with sign of Economic recovery as evident from G.D.P data, bidders are expecting traffic volume to pick-up and also expect better cash flow. As a matter of fact during 2014-15, there was 5-6% increase in traffic compare to dip in the previous year. Road sector has certainly started showing revival after slowdown in last three years. The initiative taken by Ministry have begun to show quantifiable results. Road projects execution picked up pace with 5.5 km per day completed in first quarter of 2015, a considerable jump compare to earlier year. This is reflected in revival of BOT mode for building highway. In the current fiscal eight bids covering 1000 k.m. distance costing Rs.13406/- crores were received partly on BOT basis with a viability gap funding i.e. subsidies, Condition and partly on giving premium to N.H.A.I as per detail given in Table ‘B’ below:

Table B

VGF: Viability Gap Funding It can thus be seen that N.H.A.I. shall receive Rs.87.80 crores as premium called negative grant from Developers and shall have to pay Rs.1446.47 crores by way viability Gap Funding. Recently Ministry is given authority to sanction Rs.1000/- Crore project on EPC basis without cabinet approval. Most disturbing facts is that about 112 cases of arbitration involving Rs. 25000/- crores are pending under arbitration between N.H.A.I. and developers as of April 2015. Arbitration awards were routinely challenged by N.H.A.I. in courts. Nevertheless the road sector continues to face some key issues. Land Acquisition is area of concern for many projects. There is a need for effective dispute resolution mechanism, proper project development and preparation and more balance risk allocation. In a bid to make all national highways free of railway level crossings by 2019, the ministry launched the Setu Bharatam

programme in March 2016. The programme entails the construction of RoBs or underpasses at all 208 level crossings in the country at an investment of Rs. 208 billion. Of the 208 projects, 33 bridges have been proposed in Andhra Pradesh, 22 in West Bengal and 20 in Bihar. As of March 2016, the MoRTH has completed the preparation of detailed project reports (DPRs) for 73 RoBs. Besides, the programme’s scope also includes the upgradation and improvement of about 1,500 old bridges at a cost of Rs. 300 billion. Further, the MoRTH also launched an Indian Bridge Management System (IBMS) on 1 October 2016, to undertake inventory management of all national highway bridges. Conceptualized in August 2015, the IBMS will help create a database of defiant bridges in the country and suggest remedial measures for them. The system has been developed by IDDC Engineers Private Limited.

Housing for all by 2022

At the inaugural function of Vibrant Gujarat Global Summit 2017 on 9th January 2017 at Gandhi Nagar Hon’ble Prime Minister said that, Government is striving to provide a roof for every one by 2022. Indian Construction is presenting Housing Scenario from article prepaid by (KPMG) “Decoding Housing for all by 2022”.

Report of the Technical group on Urban Housing shortage (2012-2017) and working group on Rural Housing (2012-2017) submitted the same in 2011 to their respective ministries. Report estimated that almost a quarter of Indian households lack adequate housing facility. Country is on the verge of large scale urbanisation over the next few decades. As per 2011 census, country’s population was 121 crores and expected to reach 150 crores by 2050. Present urbanisation rate of 28% in 2011 is to accelerate to 52% by 2050. Urban population from 41 crores in 2014 expected to rise to 58.30 crores by 2030 and ultimately reaches to 81 crores by 2050 as per “KPMG India Analysis July 2014”. Housing is a basic need for humans. Central Government acknowledges the importance of housing and aims to provide housing to all it’s citizen by 2022. In order to fulfill this vision, additional 4.63 crores urban houses and 6.70 crores rural houses are required to be constructed. Government is planning to provide 6 crores units whereas balance 5.33 crores is to be provided in private sector partnership. Details of statewise urban and rural housing requirement is given in Table ‘A’ below:-

Table ‘A’ Details of Statewise Urban and Rural Housing Requirement

(Figures are in lakhs) Sr. No.

Name of State No. of Urban Housing

Units required in

2022

No. of Rural Housing Units

required in 2022

Total Housing

Units required by

2022 1. Uttar Pradesh 54 146 200

2. Madhya Pradesh 22 51 74

3. Rajasthan 21 45 66

4. Delhi 30 3 33

5. Haryana 11 14 25

6. Punjab 10 13 23

Northern Region 148 272 421 7. Maharashtra 50 55 105

8. Gujarat 29 21 50

9. Goa 2 1 3

Sr. No.

Name of Highway Project

Length in k.m

Project Cost in Rs. Cr

Name of Company

Premium offered OR viability gap

funding in Cr. 1 Raipur-Bilaspur

in Chattisgarh 126 1479.32 Essel Project 449 (V G F)

2 Mukarba Chowk Panipat in Haryana

70.5 2128.72 Essel Infra 189 (V G F)

3 Agra-Etawali Bypass in U.P.

124.5 1650.20 IRB Infrastructure

81 (Premium)

4 Bioara-Dewas in M.P

141.26 1583.79 Oriental Structural Engineers

252.83 (V G F)

5 Guna-Bioara in M.P

93.5 1012.90 Dilip Buildcon 27 (VGF)

6 Fagne-Maharashtra-Gujarat Border

140.79 1885.74 ITNL 245.14 (VGF)

7 Amravati-Chikhli in Maharashtra

194 2288.18 ITNL 183.50 (VGF)

8 Solapur-Bijapur- in Maharashtra

109 1377.39 Uniquest Infraventure

6.8 (Premium)

Total 999.65 13406.24

Western Region 81 77 158

10. A.P. including Telangana 37 40 77

11. Tamil Nadu 39 18 57

12. Karnataka 28 21 49

13. Kerala 27 9 36

Southern Region 131 88 219 14. Bihar 19 69 88

15. West Bengal 34 42 76

16. Orissa 9 26 35

17. Jharkhand 11 18 29

18. Chhattisgarh 8 14 22

Eastern Region 81 169 250 19. Hilly Region 22 44 65

All India 4.63 crores 6.50 crores 11.33 crores 20. Demand between 2014

and 2022 2.73 crores 2.70 crores 5.43 crores

21. Urban Housing shortage of E.W.S. in 2012

1.055 crores

22. Shortage of LIG in 2012 0.741 crores

23. Shortage of M.I.G. in 2012

0.082 crores

1.878 crores

24. Investment required upto 2022

1.80 Trillion Dollar



Source:- Report of the working group on Urban Housing shortage (2012-2017), Ministry of Housing & Urban Poverty Alleviation. Working group on Rural Housing for XII Five Year Plan, Ministry of Rural Development 2011. Census 2011 KPMG in India Analysis. Note :- Above estimate reveal that 75 percent of housing requirement until 2022 would be concentrated in ten states of U.P, Maharashtra, Bihar, West Bengal, Andhra Pradesh (including Telengna), Madhya Pradesh, Rajasthan, Tamil Nadu, Gujarat and Karnataka. The total housing requirement of 11.33 crores by 2022 includes housing shortage of 5.90 crores as on 2014. The break-up of current housing shortage, requirement between 2014 and 2022 is given in Table ‘B’ below :-

Table ‘B’ Sr. No.

Particulars Urban Housing Units in crores

Rural Housing Units in crores

Total Housing Units in crores

1. Shortage of Housing Units in 2014.

1.90 4.00 5.90

2. Demand between 2014 and 2022.

2.73 2.70 5.43

Total 4.63 6.70 11.33

Source :- Report of Urban Technical Group (TG-12) on Urban Housing shortage (2012-2017), Ministry of Housing & Urban Poverty Alleviation September 2012. As per K.P.M.G’s estimates, development of such large quantity of houses may require investments of over USD2 trillion i.e. Rs. 120/- lakh crores (dollar at Rs. 60). This translates to about USD250 to 260 billion annually i.e. Rs. 15/- lakh crores to Rs. 15.60 lakh crores, more than double the annual investments witnessed in FY14. About 85 to 90 per cent of the total investments would be required for developing urban housing, where development costs are high due to factors such as land prices, construction cost, fees, and taxes. Within urban housing, it is the affordable housing (houses for EWS/LIG households) which require attention on priority basis, as it alone would require about half of the total investments and 70 per cent of urban housing needs

envisaged. These investments need to be complemented with additional investments of about USD1.5 trillion in urban infrastructure and commercial real estate. Thus, a total investment of over USD3.5 trillion may be required for urban housing and supporting infrastructure. Though, housing deficit is much wider in rural areas compared to urban areas, it requires only a small portion of total investments envisaged till 2022, which can be meted out without much difficulty. In our view, the central government with participation from state governments, drafting a plan of delivering three crore houses in rural areas with an investment of INR3.45 lakh crore (USD58 billion) by 2022 is a good start. With the current set of housing development policies in place and assuming an annual growth in investments by about five to six per cent in the housing sector (as witnessed since FY08), the required investments may fall short by about USD500 to 600 billion. This gap in funding would likely be restricted due to several structural issues in the sector such as high gestation period of housing projects, limited and expensive liquidity, spiralling land and construction cost, high fees and taxes, unfavourable development norms, and affordability vis-à-vis housing prices for EWS/LIG households. Mobilisation of such huge resources (funding, construction capacity, labour, technology, etc.) for mass scale affordable housing development by the central and state governments may be difficult, without participation from the private sector. The private sector, which is often better in term of managing construction risks and project delivery, should be encouraged by central and state governments, by addressing several structural issues Since the beginning of the twenty first century, a slew of regulatory reforms such as allowing foreign direct investments, improving access to credit by households, providing tax incentives on housing loans, developing special economic zones and thrust on infrastructure development, coupled with high economic growth, have propelled private sector participation in urban housing development. However, it has largely resulted in the development of Middle Income Group (MIG) and High Income Group (HIG) houses, leading to significant shortage of EWS/LIG or affordable houses. As per the report of the Technical Group on Urban Housing Shortage, EWS/LIG houses constitute more than 95 per cent of the housing shortage in 2012 as per detail given in Table ‘C’ below:-

Table ‘C’ Urban Housing Shortage 2012

Sr. No.

Classification of Housing Units

Number of Units in Million

Shortage in percentage term

1. Economically Weaker Section (EWS)

10.55 56.18

2. Low Income Group 7.41 39.44

3. Middle Income Group & above

0.82 4.38

Total 18.78 100.00

Source:- Report of the Technical Urban Group (TG-12) on Urban Housing Shortage 2012-2017. Ministry of Housing & Urban Poverty Alleviation September 2012.

Government has changed yearly income bend for E.W.S./LIG/MIG in July 2015, which is as per Table C-1 below :-

Table C-1

Sr. No.

Category of Housing

Yearly income Bend earlier in Rs.

Housing shortage as

per Technical group on

urban Housing

shortage 2012

Revised yearly income bend as

on 8.7.2015 in Rs.

1. EWS 60000 10.55 million Upto 3.00 lakh

2. LIG 60000 to 1.20 lakh

7.41 million Bet. 3.00 to 6 lakh

3. MIG Above 1.20 lakh

0.82 million Above 6 lakh

18.78 million

Despite such huge demand for all type of housing and more particularly for EWS and LIG, development of urban affordable houses has been limited due to several structural issues making it unfeasible business proposition for the private sector. Major structural issues restricting private sector participation in urban affordable housing are depicted below:-

1) Real Estate is a low volume, high margin business requires very high long term capital requirement for purchase of urban land at high price. Its working capital requirement is low. Any given project has gestation period of 6/8 years. Most of real estate players are in unorganized sector. There are hardly 50/60 listed companies on Mumbai Stock Exchange.

2) Town planners all these years prescribed horizontal development of cities with low or restrictive FSI/FAR in order to reduce migration into cities. Horizontal expansion of cities resulted in resource starved local urban bodies unable to provide civic infrastructure in terms of roads, water mains, sewerage, and health/educational infrastructure. India’s per capita urban infrastructure spending even otherwise is about 17 dollar against requirement of 100 dollars.

3) Currently 30/40 N.O.C. are required from various departments / authorities / organisation which takes more than 18 months before approval of building plan. This delay add to the cost of project by way of interest burden.

4) Migrant could not find flats at affordable price in formal housing sector ultimately purchased in informal housing sector. This resulted in proliferation of slums in all big towns.

5) Real estate being high capital intensity business with long gestation period, has to depend on high interest rate, short term loans, either from Banks or from private source in absence of institutions of such as pension funds, PF funds offering long terms loans at low interest rate. This add to overall project cost

besides slowing down or delayed completion of housing projects.

6) Several indirect taxes such as VAT, stamp duty, service tax together add to about 35% of property cost. Details of various taxes to be paid are as per Table ‘D’ below :-

Table ‘D’ List of direct and indirect taxes imposed on real estate

development

Sr. No.

Tax Percentage of property cost

1. Development agreement stamp duty 5

2. Stamp duty on purchase of property 5

3. Registration charges 1

4. Value added tax on purchase of construction material

1

5. Service tax to contractor on service component 2.6

6. VAT to contractor on goods component 4

7. Other levies such as service tax 2.6

8. Excise and custom duty 15

Total 35

Source :- KPMG in India analysis, 2014; NAREDCO – Funding the vision – Housing for all by 2022. Note :- Stamp Duty is charged on Stamp Duty Ready Reckoner rate or jantry rate.

7) As per KPMG’s estimate urban housing need would require 1.7 to 2.00 lakh hectars of land to meet the housing need till 2022 as per detail given in Table ‘E’ below :-

Table ‘E’ This analysis is based on a FAR/FSI of 1.5 times the land area. The actual requirement of land may decrease. If the unoccupied houses of about 94 lakh, as mentioned earlier, are occupied.

Urban housing land requirements

Source:- KPMG in India analysis In view of revised income bend for EWS/LIG/MIG as stated in Table C-1, revised requirement of area / land is as per Table E-1 below :-

EWS LIG MIG HIG Total Housing need till 2022

Crore 1.7-1.9 1.3-1.5 0.8-1.0 0.4-0.5 4.4-4.8

Super-built up area

Sq.ft 300 650 1,000 1,500

Land required

Crore sq.ft

510-570

850-980 800-1,000

600-700 2,700-3,200

Land required

Hectare 47,000-53,000

78,000-90,000

74,000-93,000

55,000-64,000

250,000-300,000

FAR/FSI# X 1.5 1.5 1.5 1.5

Land required

Hectare 31,000-35,000

52,000-60,000

50,000-62,000

37,000-43,000

170,000-200,000

Table E-1

Requirement of area under various categories

FAR/FSI varies in different cities according to urban infrastructure and for calculation purpose has been assumed at 1.5 times the land area. Note:- Land Acquisition Act 2013 has ensured urban land price shoot up. In view of above mentioned scenario, question that arises is whether Real Estate and construction Industry is capable of delivering of about 70 lakh housing units every year from 2015 to 2022, more so in the background of fact that present deliverable capacity may be maximum upto 8/10 lakh units yearly. Comparative statement of progress under various Social Housing Scheme is as per Table F below :-

Table ‘F’ Comparative statement of progress under various social

schemes Sr. No.

Name of scheme

No. of housing to

be constructed

as approved

Completed houses in number

Under construction in number

Shortfall in

number

1. Rajiv Awas Yojna

120000 in 16 cities

1154 18281 100565

2. Affordable Housing

20472 4528 2200 13744

3. Jawaharlal Nehru under Renewal Mission

1440000 831000 36100 248000

Though the task is stupendous, but can be achieved if not by 2022 but by 2030 subject to all the stake holders i.e. Government both Central, States and Local self, real estate developers, professionals such as engineers, architects and construction contractors come together and initiating following steps to achieve result.

A) Town planning departments need to change concept from low rise horizontal development of cities into high rise vertical development with higher density i.e.

high FAR/FSI. This would bring down cost of providing civic infrastructure, since urbanization area would be reduced.

B) The present building approval plans by Municipalities is not only time consuming but cumbersome. Real estate developers have to obtain minimum 30 N.O.C’s from different department / Organisation, resulting in cost escalation. Many of N.O.C’s are irrelevant and are duplication. It is suggested that a single window clearance system connecting regulatory authorities at Central, State and Urban Local Body level, supported by a technology plat form would help reduce complexities and delay.

C) There is dire need to reduce indirect taxes

aggregating to 35% as shown in Table ‘D’ by all authorities to incentivise affordable housing development to improve housing affordability.

D) The Land Acquisition Rehabiliation & Resettlement

Act 2013, is expected to have a majot impact on large scale township and affordable housing projects. Needless to state that few provision of LARR Act 2013 are deleted or be suitably amended to achieve housing target.

E) Ministry of Skill Development & Entrepreneurships realesed a report in April 2015 stating therein that building construction and real estate sector employed 45.40 million people in 2013 which is expected to reach to 76.60 million by 2022. Most of construction workers are not skilled. It is therefore necessary for Construction Skill Development Council of India (CSDCI) to undertake onsite training of construction workers. State governments should realese 20% of building & other Construction Workers Welfare Cess collected at rate of 1% on construction contract amounting to Rs. 13000/- crores as on March 2015. This would enhance productivity of worker and saving in wastage of construction material.

F) Present cast-in-situ construction system need to be

changed to errection of readymade various building component such as beam, column, slabs manufactured in factory. It is necessary to standardise design parameters. Alternatively main construction contractors need to promote specialised foundation, superstructure and finishing contractors for timely and faster completion project.

G) Increased environment concern has reduced

availability of natural sand and coarse aggregate, delaying housing projects. Ministry of Housing of states and centre jointly with trade bodies such as BAI, CREDAI, CFI, NHBF fund research on use of alternative such as construction waste, flyash, slag from steel plant in place and steal of natural sand.

H) Housing Regulatory Authorities to be formed in each

state to regulate real estate sector and bring about

Sr. No.

Category of

Housing

Area for each

household as per 2012 requirement

Housing shortage

Total area

require-ment in million sq.mt.

Under new

income bend total

housing shortage

in million

Total area

required as per new

definition

1. EWS 30 sq.mt. 10.55 million

316.50 17.96 17.96x30=538.80 million sq.mt.

2. LIG 60 sq.mt. 7.41 million

444.60

3. MIG

761.10

transparency. There has to be “carpet area” norm/standards for building approval plan by Urban Local Bodies, sale on carpet area basis by real estate developers to avoid possible litigation on charged area for flat. It should also be made mandatory for registration and grading of real estate developers for professionalisation of real estate business.

I) Provident Fund corpus & Insurance Funds be

invested in housing projects either through instrumentality of REITS or other specially created bonds by RBI. This will provide long term funding requirement to housing sector at lower interest rate than that of Banks. Housing Finance Companies need to increase home loan tenure from 20 years to 30 years, so as to reduce equated monthly installments. (EMI) to be paid by flat purchasers. Necessary tax incentives to be given to all the schemes.

The Real Estate (Regulation and Development) Bill, 2013 The Real Estate (Regulation and Development) Bill, 2013 was introduced in the Rajya Sabha by the Union Ministry of Housing and Urban Poverty Alleviation on August 14, 2013. The Standing Committee on Urban Development (Chairperson : Mr. Sharad Yadav) submitted its report on February 13, 2014. Highlights of the Bill The Bill regulates transactions between buyers and promoters of residential real estate projects. It establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERAs). Residential real estate projects, with some exceptions, need to be registered with RERAs. Promoter cannot book or offer these projects for sale without registering them. Real estate agents dealing in these projects also need to register with RERAs. On registration, the promoter must upload details of the projects on the website of the RERA. These include the site and layout plan, and schedule for completion of the real estate project. 70% of the amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project. The state government can alter this amount to less than 70%. The Bill establishes state level tribunals called Real Estate Appellate Tribunals. Decisions of RERAs can be appealed in these tribunals.

Key issues and analysis One may question Parliament's jurisdiction to make laws related to real estate as "land" is in the State List of the Constitution. However, it may be argued that the primary aim of this Bill is to regulate contracts and transfer of property, both of which are in the Concurrent List.

Some states have enacted laws to regulate real estate projects. This Bill differs from these state laws on several grounds. It will override the provisions of these state laws in case of any inconsistencies. The Bill mandates that 70% of the amount collect from buyers of a project be used only for construction of that project. In certain cases, the cost of construction could be less than 70% and the cost of land more than 30% of the total amount collected. This implies that part of the funds collected could remain unutilized, necessitating some financing from other sources. This could raise the project cost. The Standing Committee examining the Bill has made several recommendations. These include: (a) the Bill should also regulate commercial real estate, (b) smaller projects should also be covered, and (c) all real estate agents must be required to register. The real estate sector has some other issues such as a lengthy process for project approvals, lack of clear land titles, and prevalence of black money. Some of these fall under the State List. PART A : HIGHLIGHTS OF THE BILL Context Real estate involves the sales, purchases and development of land for residential, commercial and industrial purposes. Different aspects of real estate are regulated by different levels of government. Real estate projects are currently regulated by state government under their respective state town and country planning or apartment ownership Acts. Typically, town and country planning Acts regulate land use and development. Apartment Ownership Acts regulate individual ownership of apartments in buildings with multiple apartments, approvals for construction of real estate projects are primarily given at the local and state level. Certain approvals are given by the central government. Consumer grievances may be redressed through forums established under the Consumer Protection Act, 1986. Unfair trade practices may be challenged under the Competition Act, 2002. Several court cases have addressed issues in the sectors such

as unfair buyers' agreements and illegal construction.2 The Competition Commission of India has pointed out that the absence of a single regulator for the real estate sector is partly

responsible for poor grievance redressal.3 In 2013, the Committee on Streamlining Approval Procedures in the Real Estate Sector recommended making the sector more transparent, with information on real estate projects made easily available. It also recommended strengthening grievance redressal mechanism in case of non-compliance with building

standards or contracts.4 In 2009, the Ministry of Housing and Urban Poverty Alleviation had published a Model Real Estate Regulation and Development Bill, to regulate and promote real estate and

ensure consumer protection.5 The Model Bill provided a legislative framework which state governments could choose

to adopt while enacting their own laws. Some states have enacted laws or are in the process of enacting laws to regulate

the real estate sector, along the lines of the Model Bill.6 The Real Estate (Regulation and Development) Bill, 2013 seeks to regulate contracts between buyers and sellers in the real estate sector to ensure consumer protection, and standardization of business practices. It establishes regulatory authorities at the state level to register residential real estate projects. The Standing Committee examining the Bill

submitted its report on February 13, 2014.7 Key Features Real Estate Regulatory Authorities, Appellate Tribunals All States and Union Territories (UTs) must establish state level regulatory authorities, called Real Estate Regulatory Authorities (RERAs) within one year of the Act coming into force. Two or more states or UTs may set up a common RERA. A state or UT may also establish more than one RERA. • Functions of a RERA include: (a) ensuring that

residential projects are registered, and their details uploaded on the RERA website, (b) ensuring that buyers, sellers, and agents comply with obligations under the Act, and (c) advising the government on matters related to the development of real estate.

• Each RERA will consist of a chairperson and at least

two full time members with experience in sectors such as real estate, urban development, law and commerce.

• One or more tribunals, called Real Estate Appellate

Tribunals, will be established in States and Union Territories to hear appeals against decisions of RERAs. One Tribunal may be established for two or more states. Each Tribunal will consist of a chairperson and two members, one with a judicial background and one with a technical background.

• If a RERA observes that an issue impacts competition, it

may refer the case to the Competition Commission. • A Central Advisory Council, consisting of

representatives from union ministries, state governments, RERAs and representatives of the real estate industry, consumers, and labourers will be established. The Council will advise the central government on major questions of policy, and protection of consumer interests.

Registration of real estate projects and agents • The Bill requires that all residential projects, with some

exceptions, be registered. Promoters cannot book or offer these projects for sale without registering them. Registration is not required for projects that: (a) are less than 1000 square metres, or (b) entail the construction of less than 12 apartments, or (c) entail renovation/repair/re-development without re-allotment or marketing of the project.

• State governments can establish a lower limit for the exemption. Where a project is developed in phases, each phase must be registered separately. In order to register, the promoter must provide details such as the layout plan of the project, and the carpet area of property for sale to the RERA.

• If the applicant does not hear back from the RERA

within 15 days of the application for registration, the project will be considered registered. Registration may be revoked after giving 30 days notice to the promoter. In case of revocation, the RERA can recommend the completion of the project through the competent authority or association of buyers or in any other manner. Here, competent authority refers to the local authority responsible for land development.

• Real estate agents must register with a RERA in order to

facilitate the sale or purchase of property in real estate projects that have been registered. Registered agents must not facilitate the sale of unregistered projects or mislead buyers regarding services offered.

Duties of the promoter and the buyer • On registration, the promoter shall upload details of the

project on the website of the RERA including the number and types of properties for sale, and quarterly updates on the status of the project. In addition, the promoter must make the site and layout plans of the project, and the schedule of completion of the project available to the buyer. In case a buyer incurs a loss because of false advertising, and wishes to withdraw from the project, the promoter must return the amount collected, with interest.

• 70% of the amount collected for the project from buyers

must be used only for construction of that project. The state government can change this amount to less than 70%. The promoter shall not accept more than 10% of the total cost of the property as an advance payment without entering into a written agreement.

• The promoter shall: (a) obtain a completion certificate

from the relevant authority, (b) form an association or society of buyers, and (c) provide essential services till the association of buyers takes over the maintenance of the project. If the promoter is unable to give possession of the property, he shall be liable to return the amount received by him for the property, with interest.

• The buyer must make required payments within the term

specified in the agreement signed with the promoter. He will be liable to pay interest for any delay in payment. Buyers must participate towards the formation of an association/society/cooperative society.

PENALTIES • In case the promoter fails to register the property, he

may be penalised up to 10% of the estimated cost of the project. Failure to register despite orders issued by the RERA will lead to imprisonment for up to three years,

and/or an additional fine of 10% of the estimated cost of the project. The promoter will have to pay up to 5% of the estimate cost of the project if he violates any other provisions of the Act.

• Real estate agents will have to pay a fine of Rs 10,000

for violating any provisions of the Act, for each day the violation continues.

PART B: KEY ISSUES AND ANALYSIS Jurisdiction of Parliament to legislate on real estate The Bill seeks to regulate transactions between buyers and promoters of residential real estate projects to ensure: (a) consumer protection, and (b) standardisation of business practices in the sector. It does so through establishment of real estate regulatory authorities at the state level. Currently, real estate projects are primarily regulated by state governments as land and land improvement are in the State List of Seventh Schedule of the Constitution. Under Entry 18 of the State List, states can make laws related to land, or rights in or over land; land improvement; and colonization of land. In response to parliamentary questions, the Ministry has stated it is primarily the responsibility of state governments to regulate real estate and that states must monitor real estate

projects.8 However, the scope of this Bill is limited to contracts between buyers and promoters, and transfer of property. Both these

items fall within the Concurrent List9. A government press

release also states this position.10 Inconsistencies with state laws regulating real estate Clause 78 of the Bill The Bill provides that states can continue to apply their laws regulating real estate, to the extent that these laws are not inconsistent with the Act. However, several states have enacted or are in the process of enacting laws that have provisions that are inconsistent with the Bill. These provisions will be superceded by the Bill. Some examples are listed below. While the central Bill mandates establishing a statutory regulatory authority to register projects in a state, West Bengal

has delegated this function to a government department.11 While the central Bill mandates that 70% (or less, as determined by state governments) of the funds collected from buyers of a project be used only for construction of that project, certain state governments have allowed for greater flexibility in usage of funds. The Maharashtra Housing Regulation and Development Act, 2012 mandates that the entire amount collected from buyers be kept in a separate

account and be used for purposes collected6. The draft Haryana Real Estate (Regulation and Development) Bill, 2013 mandates that 70% of the amount collected from buyers for a

project be used for that particular real estate project.6

States such as Punjab, West Bengal and Uttar Pradesh have stated that they would prefer to continue existing laws to

regulate real estate12. We compare the Bill with certain state laws in the Annexure.

70% of amount collected from buyers to be used only for construction Clause 4(2)(i)(D) The cost of a real estate project includes the cost of land and the cost of construction (and the profit margin). The Bill mandates that 70% (or less, determined by states) of the amount collected from buyers for a particular project be deposited in a separate bank account and be used only for construction of the project. The provision seeks to address the practice of builders using money from an existing project for

other projects, resulting in delays in completion7. However, this provision could lead to an increase in the cost of the project. In some cases, the cost of land may be higher than 30% and the cost of construction less than 70% of the total cost of the project. Mandating that 70% of the amount collected from buyers for a project should be used only for construction of that project, could lead to part of the money collected remaining unutilised. At the same time, the developer may need to borrow funds to finance the cost of purchasing land. The interest cost on these funds would increase the project cost, which may have to be borne by the buyers. Similar legislation has addressed the issue differently. The Model Bill (2009) states that the entire amount collected from buyers be kept in a separate account and be used for purposes

collected, allowing for greater flexibility in its usage.5 The

Maharashtra Act (2012) does the same.6 The draft Haryana Bill (2013) mandates that 70% be collected and that this

amount be used for the real estate project.6 Key recommendations of the Standing Committee The Standing Committee on Urban Development submitted its

report on the Bill on February 13, 2014.7 Key recommendations relate to: • Commercial and industrial real estate: The current Bill

seeks to regulate only residential real estate. The Bill should regulate commercial and industrial real estate as well.

• Exclusion of certain projects: The exclusion of projects

smaller than 1,000 square meters or 12 apartments from the purview of the RERA could lead to the exclusion of a large number of small housing projects. This limit should be lowered to 100 square meters and three apartments.

• Registration of all real estate agents: All real estate

agents should be required to register with a RERA and not just those facilitating the sale of a project covered by the Bill.

• Single window system for project approvals: A new

provision should be inserted to allow RERAs to give directions to state governments to establish a single window system for providing clearances for projects. A time limit should be specified for state and local authorities to issue completion certificates.

• Definition of carpet area: The Bill defines carpet area as

'net usable floor area' of an apartment, excluding the area covered by its walls. The term 'net usable floor area' should be defined in the Bill.

• Structural defects: The Bill specifies that a promoter

must rectify any structural defect which is brought to his notice within two years of allotment. This term should be increased to five years.

Other key issues in the real estate sector Several committees and government agencies have outlined

major challenges in the real estate sector.4,15,16 However, it is unclear if a central law can address these issues, given that some of these items fall under the purview of the state government. • Lengthy approval process for project clearances: In

2012, the Committee on Streamlining Approval Procedures for Real Estate Projects recommended establishing a single window clearance system for approvals. It noted that up to 50 approvals are required for projects, across three levels of government, taking up

to four years.4 The Bill allows RERAs to make recommendations to

state governments regarding measures to improve the approval process. However, the Standing Committee has recommended that a new provision be inserted to allow RERAs to direct state governments to establish a single

window system.7 • Lack of clear land titles: The Planning Commission has

pointed out that unclear land titles and lack of transparency in real estate transactions are detrimental to

the development of the real estate sector.13 In 2010, the centre published a Model Bill, the draft Land Titling

Bill, to reform the land titling system.14 In 2012, the Standing Committee on Rural Development suggested that modernisation of land records, including land titles, would be useful for land based developmental and

regulatory activities.15 • Prevalence of black money: In a 2012 paper on black

money, the Finance Ministry pointed out that the real estate sector, which constitutes about 11% of the GDP of the country, is particularly vulnerable to black money through under reporting of transaction prices while

paying taxes.16

Ref: 11/A/20146-17 dated April 12, 2016

The Joint Director (Com III) Rajya Sabha Secretariat, Room No. 212A, Parliament House Annexe, New Delhi – 110001 Sub: BAI’s comments on the Real Estate (Regulation and

Development) Bill – 2013 (RERA) Dear Sir, Builders’ Association of India (BAI) is an apex all India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 15,000 business entities as members through its 154 plus Centres (Branches) throughout the country. Regional Associations Affiliated to BAI form indirect membership of more than 1,00,000. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as policy level problems faced by the construction industry. 2. BAI believes itself to be the chief vehicle of delivering the national objective of housing for all by 2022. Construction of 50-60 million units that it entails is possible only with involvement of real estate developers. Given the high income and employment multiplier of housing, real estate development needs to be actively promoted. Housing development also reduces income inequalities. For all these reasons, real estat development needs a supporting policy environment. Our view on RERA set out below emanate from this sense of responsibility. 3 The precise objective for RERA needs to be well thought out. Regulation for the sake of regulation would only add one more layer of approvals, increase transaction cost, and make housing even more expensive for the ultimate consumer. As it is, real estate is regulated by a multiplicity of laws. Consumer rights are adequately safeguarded through the Consumer Protection Act, 1986. The Bill is weak on the issues to be addressed an lumps all projects together. 4. The Bill proposes to cover “Commercial/industrial and other related projects”, alongwith Residential projects. Commercial sector and other related segments have resources and expertise to evaluate and conduct required due diligences and are safeguarded by the provision in various other laws. Hence, if there be an issue that requires regulation, it may at best relate only to the residential projects and not commercial or industrial projects. Accordingly, the Bill should focus on the Residential projects and leave all other projects out of its coverage. 5. The Bill proposes to cover all ‘existing projects’, where the completion certificate has not been received. It is not clear, how the projects which are already on-going can be made to comply with the registration and other requirements without leading to delay, cost overrun and customer harassment. Further, the requirement to bring projects which are ongoing within the coverage of the Bill is also arbitrary.

Thirdly, including the existing as well as under development projects within The Bill would create a huge backlog. Hence, it is only the “Green Field” projects (i.e. projects launched and registered after notification of the RER&D Act), that may be appropriately covered under the proposed Bill. 6. Under the provision of the Bill, registration is online and deemed in 15 days but the regulator will subsequently ALLOT a user log in ID until when the sales cannot be made. We are concerned, as to how would deemed registration in 15 days help if developers still have to wait for the log in ID. On the other hand, the regulator will subsequently scrutinize all documents and can cancel registration if he thinks they are not in order. The question which arises is that if there is deemed registration, how subsequent scrutiny can may be effected only if there is a subsequent infraction or misdemeanor. 7. Revocation of registration cannot be arbitrary. According to Section 7(a), the Real Estate Regulatory Authority may revoke the registration upon being satisfied that the promoter has made willful default in doing anything required of him by or under the Act or the rules and regulations made thereunder. However, willful default is not defined in the Act. This implies possibility of completely arbitrary principles in determining what the willful default is. Hence, it is requested first of all that what constituted willful default may need to be clearly defined. Secondly, for the process of revocation to be equitable, it should be made clear that the process of revocation would follow the principal of natural justice and provide for the promoter being given adequate opportunity of being heard. 8. Section 5 in its current form restricts the validity of registration to be conterminous with the likely period of time within which the completion of the project is envisaged by the promoter under provision of 4(2)(i)(c). it does not take into account other stakeholders like the ‘competent authority’ or functional agencies or financial agencies who are not answerable to the Regulatory Authority which results in the delays on the project. On the other hand, the ‘promoter’ is made solely responsible and liable to be penalized for delays and non-compliance. Hence, it is necessary to bring all entities associated with grant of approval for the projects such as Urban Local Bodies into the ambit of RERA, and in particular Section 5 to enable the Real Estate Regulatory Authority to issue appropriate direction to them for the sake of timely completion of projects. The grant of occupancy certificate/completion certificate/plinth certificate should be provided for on a time bound and automatic basis. Further, it should be explicitly provided that the project promoters are not liable for delays on account of want of approvals from statutory authorities. 9. It is also feared that including “Tenants”, within the ambit of the Bill, would drift the focus away from the core of the Bill to streamline and cover the “Developer-Buyers” relationships. “Tenants” enter into a property only after the Developer has acquired the “Occupancy Certificate’ and then the “Apartment” is handed over the “Buyer”. By involving “Tenants”, who are temporary occupants on rent (for a limited time period), the Bill’s “Developer-Buyer” mandate would get

diluted. Hence, it is urged that the Bill restricts its scope only to “Developer-Buyer” and any activity beyond the handover of the real estate project to the ‘Buyer’ should stay outside the ambit of the bill. 10. Some of these suggestions are further elaborated in the attachment and some technical aspect are also commented upon. 11. It is requested that the above suggestions may please be given serious consideration for bringing the bill in alignment with its objectives as well as the goal of housing for all by 2022. Best Regards

Yours sincerely,

Avinash M. Patil

President Builders’ Association of India

Attachment – 1

Suggestion on Real Estate (Regulation and Development) Bill, 2013, in consideration of 2015 Amendments

S.

No. Provision in

2013 Bill Provision in

2015 Amendment

Issue/Suggestion / Objection

Remarks / Reasons1

1 S.2(i) Sr.No.8 The explanation under the Definition of “Carpet area” should include the area accessible within the apartment, excluding wall thickness

Carpet area needs to be considered and should be in line with the regulations (Development Control Regulations) framed under any law which are in force in the respective areas of the respective States

2 S.2(zf) Sr.Nos.19,20 The Definition of

“promoter” needs to be reconsidered, especially inclusion of the buyers who purchases in bulk for resale, should be removed from the definition.

- The Definition includes and considers a buyer who purchases in bulk resale

- Although some

amendments are proposed, as to who, for the purpose of this Act, will be considered a buyer who purchase in bulk for resale, it is not enough to exactly clarify obligations, if any, cast upon him as ‘promoter’

- Actually, the

obligations of such bulk-buyer are not same like

that of the promoter under the Bill, such as seeking approval of plans, development in accordance with such approved plans, registration of project, completion of project, formation of association, execution of conveyance etc.

- Such bulk-buyer

would buy only as an investment purpose, with intention to resale the flats purchased by him in bulk. If they are included in the Definition of promoter and are to be treated at par with the promoter, then their roles should also be specifically defined. However, such inclusion will adversely impact the investment opportunities impact the

investment opportunities that the bulk purchasers would be looking at

- Further, there is no procedure prescribed under the Bill for resale of flats/apartments by such bulk-buyer to respective individual purchasers and no obligation is cast on him in this regard too

- In such an

eventuality, the functions and/or obligations of the promoter under the Bill and that of the bulk-buyer are totally different and hence, its inclusion in the definition of promoter is not appropriate and should be removed

3 Explanation u/s (below) s.z (zf) (vi)

Where the person who constructs or converts the building in to apartment or develops a plot for sale and the person who sells apartments or plots are different persons, both of them shall be deemed to be the promoters

- The Explanation to this section should also exclude reference of the person who ‘sell’ the apartments (where the person who develops the apartment or plot and the person who sells

apartments or plots are different), as they are in no way connected with development activities of the promoter

- Such persons

only find prospective buyers for purchase of the apartments, plots or buildings constructed/developed by the promoter and are defined as ‘real estate agents’ at S.2 (zh) of the Bill

- It is erroneous to

include such persons in the definition of the ‘promoter’ implying that they shall be liable to discharge all the obligations of the promoter as specified in the Bill, although they do not play

any role in construction of buildings or other related pre-construction or post-construction activities undertaken by the promoter, which are being sought to be regulated by the Bill

- More so, the role

of such persons, commonly known as brokers and real estate agents, is separately regulated/governed by section 9 and 10 of the Bill

- Hence, the functions and/or obligations of the promoter under the Bill and that of the person who ‘sells’ the apartment, plot or building are totally different and hence, their inclusion in the definition of promoter is not appropriate and should be removed

4 Proviso now added u/s 3

Sr. No. 26 Addition of Proviso u/s 3 (a): This addition of the Proviso now

- Bringing the ongoing projects within the purview of the

brings the ongoing projects within the purview of the Bill, which was absent in the earlier Draft.

Bill or making the Act applicable to such projects will create lot of impracticalities

- The projects in

respect of which commencement certificate will have been issued, should be kept outside the purview of the requirement of registration as ongoing project

- Development of

the projects which will have been governed under the respective State Acts on the date of the Central Act coming into force, will have been done as per different respective provisions of the State Acts respectively applicable to them. It would not be possible to govern the

remaining project under the provisions of the Bill under Central Act in total disregard of the State Acts

- More so,

because the modalities for sale of apartments, specific undivided rights in common areas, formation of associations, execution of Conveyance etc. are varying from State to State and may not be as are envisaged and/or proposed to be stipulated by the Act

- It is not

practically possible to govern one project by two different provision of law at different times during its development. Hence this Provision should be removed

5 S.3(2)(b) Sr. No. 27 Requirement of having received the Completion Certificate by the promoter prior to commencement of the Act, should be

- The provision as it was, viz. S.3 (b) was clear enough and the projects where all the

removed approvals and commencement certificates were received prior to commencement of this Act, were rightly excluded from the requirement of registration. Hence, the amendment in this regard in 2015 amendments should be removed that S.3(b) should be restored

- For other

reasons, see the Remarks at item No. … hereinabove for registration of ongoing projects and the same be treated as reproduced here

6 S.4(2)(b), S.4(2)(c) and S.4(2)(d)

Enclosing documents with the application for registration of real estate projects, such as - commenceme

nt certificate [S.4 (2) (b)],

- layout plan for the entire project [S.4 (2) (c)],

- plan of development works to be executed in the proposed project and proposed facilities to be provided [S.4 (2) (d)]

- The requirement of submitting an authenticated copy of commencement certificate issued by competent authority is too harsh and far-fetched

- At the time of

making an application for registration of the project, the Promoter should be required to submit only the proof of having submitted the plans of the project for approval of the competent authority, authenticated by an architect. The approval and sanction from the competent authority, including commencement certificate, as and when available, obtained in accordance with the building regulations and other laws as applicable, should be uploaded on website within a specified period of obtaining the same form the respective authorities

- The reason

behind this being, if the Promoter will be required to wait till issue of commencement certificate, it will not only delay commencement of the project, it will also tremendously escalate the cost of project; the interest burden on the Promoter shall also increase which will ultimately result in increase of the cost of the apartment or plot or building. This will work to disadvantage of the allottee, for whose benefit, the entire construction activity is sought to be regulated by this Bill

- Layout plan

required to be submitted, should only be that of the Phase of the project

which may be under registration and not the plan of the entire layout. The very reason that where the layout is to be developed in phases, each phase shall be considered as a stand along project and the Promoter shall obtain registration of each phase separately [see Explanation u/s 3], is that each Phase is to be registered separately. In such an event, requirement of submission of the plan for entire layout is contradictory to the spirit of the Bill and therefore, should be removed

- Further, plan of

the development works to be executed and proposed facilities to be provided, also may not be ready at the time of registration of the project, when the plans would have been submitted for

approval and sanction. This should be required to be submitted along with the submission of the commencement certificate as indicated hereinabove

7 S.4 (2) (i) (D)

Sr.No.35 To submit a Declaration that fifty percent or such lesser percent as may be notified by the Appropriate Government shall be deposited in a separate account to be maintained with a Scheduled Bank to cover the cost of construction and to be used for that purpose

- However, there is no provision under which the promoter would be required to comply with this obligation

- Also, there is no

provision stipulating any mechanism for use of such amount by the promoter

- for construction

as stipulated in the Bill

- for operation of

such separate account for construction (essentially for which, it is to be used), or

- in the event of

revocation of registration of the project by the Competent Authority, or

- - in the event of

the allottee cancelling the transaction or the promoter terminating the Agreement on account of default by the allottee in payment of installments, and the amount required to be refunded to such allottee, on account of such cancellation or termination, as the case may be

8 S.5(2) Sr. No. 37 If the Authority would fail to grant the registration as provided us 5(1) the project shall be deemed to have been registered

There is no clarity about who shall grant the registration number, Login Id and password to the promoter for the purpose as enumerated in S.5(1), if the project shall be ‘deemed to be registered’

9 Explanation u/s.6

Sr. No. 38 Extension or registration

The circumstances beyond the control of the promoter

should also be included in and as the ‘force majeure’ circumstances e.g. scarcity of steel, cement, other construction materials, strike, labour issues, change in government policies or court orders etc. Which may adversely affect development of the projects, which may not be attributable to the Promoter and which may be unforeseen by the promoter in the beginning of the project

10 Proviso u/s 8 Obligation of Authority consequent upon lapse of or on revocation of registration

- The proviso under Section 8 should also include the words “and no appeal has been filed during such period”, after the words “….under the provisions of this Act”.

11 S.11 Promoter’s obligation to create his web page and entering all details of the proposed project upon receiving his Login Id and password from the Authority

- The details filled in by the Promoter on his webpage should not be made accessible and visible to public at large. The web page should be maintained by the Authority, which should permit the basic details and general information about the project to public, necessary for them at preliminary level

- All further

information and other details should be permitted to be obtained or provided only by the Authority, upon receipt of cost specified by it, to the persons who would apply for the same, with genuine intentions

- Or in the

alternative, if the web page has to be maintained by the Promoter, the Promoter should be permitted to show only general information about the project such as geographic location, size, umber of buildings, variety of apartment, plots

and buildings available for sale, approximate time for completion of project, general facilities and amenities intended to be provided by the promoter etc., which will give a basic and general idea about the project

- If any person who

would be interested in knowing the further details such as status of the project, cost of apartments, detailed amenities and facilities to be made available etc., can be permitted to be seen by the Promoter after verifying credentials and genuine intention of such person as a prospective buyer. For this purpose, the Promoter would give password (with a limited

validity period for use thereof) to such person to access the webpage upon such person’s making an application to the Promoter, on charging nominal fees

- If the above or any

other measures are not adopted and the webpage is not kept secured, then there are chances of misuse of the information about the project being made available and unscrupulous elements can take undue advantage which may cause loss and damage to the Promoter. Also, the Promoter’s trade secrets and designs and patents and other intellectual properties would be stolen, causing irreparable damage to the Promoter

Decoding the real estate Bill Some key legal and regulatory challenges facing the proposed

real estate regulator

When does the regulatory authority come into effect? The central and the state governments must establish the authority within one year of the proposed Act coming into force. Each government could establish one or more authority within a state or Union territory. If they deem fit, two or more states or Union territories could establish a common regulator. "Technically, we could have one regulator and an appellate tribunal in each district, if the state so decides," says Gulam Zia, executive director, Knight Frank India. How is the real estate regulator different from regulators in other sectors like insurance and telecom? The real estate regulator will have no price determining powers. It also does not have any control over clearances and approvals developers need for starting a project. "It does not address a long-standing demand of developers for a single-window clearance," says Kalpesh Maroo, partner, BMR & Associates. However, the regulator could suggest to the government to create of a single-window system to ensure time-bound project approvals.

How are promoters granted registration of a project? No promoter is allowed to advertise, market, book, sell or offer for sale, or invite persons to purchase any plot, apartment or building, in a project without registering with the authority. The regulator, within a year of its establishment, must have an online system for submitting applications for registration of projects. The authority must grant registration to a project within 30 days of receipt of an application provided it meets the rules. In an ongoing project, the promoter has to apply for registration within three months of commencement. What are the legal challenges to the 70-30 rule? To prevent diversion of funds from a project, the proposed Act prescribes that 70% of the amount a project developer receives from allottees be deposited in a separate bank account to cover the cost of construction and the land cost. The promoter is allowed to withdraw the amount to cover the cost in proportion to the percentage of completion of the project. The account has to be audited every financial year by a chartered accountant. Any withdrawal from the account has to be certified by an engineer, an architect and a chartered accountant. According to Anil Harish, partner, DH Harish & Co, the rules for valuation of land will play a key role in making the 70-30 provisions effective. Each state may come out with different rules on valuation of land, leading to ambiguity in the

provision, he adds. Factoring in the historical cost of land, in cases where the promoter has a land bank build over years, is another issue that could become contentious, feel experts. Can state governments change the 70-30 provisions? The Real Estate Bill falls under the Concurrent List and state governments are entitled to legislate. However, any amendment to a central legislation by a state government will require presidential assent if the amendments are inconsistent with the provisions under the central law. "In theory, state governments could change the 70-30 rule, however, we expect them to uphold the provisions of the bill," says Yogesh Singh, partner, Trilegal. Does the proposed law have overriding provisions over existing laws? The provisions of the proposed Act come into effect in addition to the provisions of any other law that are in force. So the central and state laws continue to be in force. However, the proposed Act expressly repeals the Maharashtra Housing (Regulation and Development) Act, 2012. Legal experts point out that many provisions of the Maharashtra Act have been incorporated in the proposed central bill. Within the first two years of notification of the proposed Act, the central government is allowed to make necessary changes in the provisions to remove operational difficulties. However, these changes have to be ratified by Parliament. Legal experts feel a significant amount of alignment will be needed between the central legislation and laws already in place in various states. Formulation of laws related to land, or rights in or over land, land improvement and colonisation of land falls in the State List. Typically, town and country planning legislations of respective states regulate land-use and development. Approvals for construction of projects are primarily granted at the local and state level. Moreover, rights of individual owners of apartments in large complexes are governed by the respective apartment ownership laws. What are the penalties for non-compliance? Promoter: For non-registration of a project, a promoter is liable to a penalty that may extend up to 10% of the estimated cost of the project, as determined by the authority. If a promoter does not comply with the orders, decisions or directions issued by the authority, he is punishable with imprisonment of up to three years. Similarly, non-compliance with any orders of the appellate tribunal is punishable with imprisonment that may extend up to three years, or with a daily fine that may cumulatively extend up to 10% of the estimated project cost, or both.

Allottee: If any allottee fails to comply with, or contravenes any of the orders, decisions or directions of the authority, he is

liable to a penalty that may extend up to 5% of the cost of the plot, apartment or building, as determined by the authority.

Non-compliance with any order of the appellate tribunal could attract prison terms of up to one year, along with a fine that may cumulatively extend up to 10% of the cost of the plot, apartment or building.

Company: When a company is found to have committed an offence, every person responsible for the conduct of the business is deemed guilty and liable to be proceeded against and punished accordingly. However, it has to be proved that the offence was committed with the consent, or connivance, of or is attributable to any neglect on part of the person.

Will the proposed Act increase the cost of compliance for the promoter and the buyer?

It will increase compliance requirements for promoters, as each project has to be vetted by chartered accountants, lawyers, tax experts, engineers, apart from other professionals. "It is likely that any increase in the cost of a project on account of additional cost of compliance, paperwork and manpower requirements, will be passed on to the allottees," says Rajesh Chavda, partner, Luthra & Luthra Law Offices.

SKILL DEVELOPMENT IN CONSTRUCTION SECTOR

Government of India established National Skill Development Corporation (NSDC) on 31st July 2008 as not for profit company licensed under Section 25 of the Companies Act, 1955. NSDC has targeted to train 150 million people by 2022, out of incremental demand of 240 million.

As mandated under NSDC’s programme Construction Industry need to form a Construction Skill Development Council to establish occupation standards, operations and delivery mechanism, certification and accreditation and Labour Market Information System (LMIS). Ultimately in a meeting held on 23rd August 2012 in the office of Shri Ramadorai, the then Adviser to Prime Minister on Skill Development and present Chairman of National Skill Development Corporation, Construction Sector Skill Development a Council of India was formed jointly by four Associations namely Builders’ Association of India (BAI), Construction Federation of India (CFI), Confederation of Real Estate Developers Association of India (CREDAI), and National Highway Builders’ Federation (NHBF). Members of the Governing Council are as follows:-

Employment Scenario – 2022 Union Ministry of Skill Development and Entrepreneurships released a report about likely employment scenario by year 2022 in April 2015. Report shows that 461 million people were employed in 24 major sectors in 2013 and projected to grow to 591.70 million people by 2022 i.e. increase of 30% in a years as detail is given in Table below :-

From the figures it is to be noted that increased productivity in farm sector would render 24.80 million farm labour surplus, which will be absorb in construction – real estate, transportation, and domestic help sectors. Further construction sector will employ 76.60 million more workman by 2022 i.e. 56% more compare to 45.40 million in 2013. Construction Industry therefore need to concentrate more on skill training to improve productivity to bring down labour cost and wastages in material. More than 200% increase of employment in Tourism, Beauty and wellness, furniture & furnishing and entertainment, suggest that households by 2022 shall have higher disposable income to spend on this sector.

Name of Member Name of Organisation Shri Ajit Gulabchand Chairman, C.F.I.

Shri S.N. Subramanian C.F.I.

Shri B. Seenaiah Past President, BAI

Shri Sushanta Kumar Basu Past President, BAI

Shri Lalit Kumar Jain Chairman, CREDAI

Shri C. Shekar Reddy President, CREDAI

Shri V.C. Verma President of NHBF

Col. Surinder Kuda of M/s. Ashoka Buildcon

NHBF

Shri Niranjan Hiranandani Additional Industry Nominee

Shri Phillie Karkaria Additional Industry Nominee

Shri Devendra Choudhary, Additional Secretary, Ministry of power

Planning Commission Nominee

Shri J. Ganguly Additional Industry Nominee

Technical Adviser to be decided by Governing Council later.

Technical Adviser to be decided by Governing Council later.

Sr. No.

Name of sector No. of people

employed in million in 2013

Percentage of

employed to total in

2013

No. of people

likely to be

employed in million by 2022

Percentage of

employed to total by

2022

Increase in employment percentage over 2013

1. Agriculture 240.40 52.30 215.60 37.30 -

2. Building Construction and Real Estate

45.40 9.90 76.60 13.20 55

3. Retail 38.60 8.40 55.70 9.60 50

4. Transportation and Logistics

16.70 3.60 28.40 4.90 57

5. Textile & Clothing

15.20 3.30 21.50 3.70 27

6. Education / Skill Development

13.00 2.80 17.30 3.00 26

7. Handloom & Handicraft

11.70 2.50 17.80 3.10 50

8. Auto & Auto Component

11.00 2.40 14.90 2.60 26

9. Construction Material

8.30 1.80 11.00 1.90 24

10. Security 7.00 1.50 11.80 2.00 51

11. Food Processing 7.00 1.50 11.40 2.00 51

12. Tourisam, Hospitality & Travel

7.00 1.50 13.40 2.30 54

13. Domestic Help 6.00 1.30 10.90 1.90 75

14. Gems & Jewellary

4.60 1.00 8.20 1.40 70

15. Electronics & IT Hardware

4.30 0.90 8.90 1.50 100

16. Beauty & Wellness

4.20 0.90 14.30 2.50 300

17. Furniture & Furnishing

4.10 0.90 11.30 2.00 75

18. Healthcare 3.60 0.80 7.40 1.30 100

19. Leather & Leather Goods

3.10 0.70 6.80 1.20 100

20. IT & ITES 2.80 0.60 5.10 0.90 100

21. Banking & Finance

2.60 0.60 4.30 0.70 70

22. Telecommunication

2.10 0.50 4.20 0.70 100

23. Chemicals & Pharmaceuticals

1.90 0.40 3.60 0.60 100

24. Media & Entertainment

0.40 0.10 1.30 0.20 300

Total 461.00 100.00 591.70 100.00

Skill Development of Construction Workers

1) Construction Skill Development Council of India is a

non profit making company, registered under section 8 of the companies Act 2013. It is registered on 11 September 2013 with Registrar of Companies at Delhi, having it’s address at 204, Aashirwad Complex, D-1, Green Park, New Delhi – 110016. It is formed by four construction related trade associations with equity participation as per table below :-

2) C.S.D.C.I. got approved by NSDC / curriculum in respect of following trades :

S. No

Occupation S. No.

QP Code Job role NSQF Level

1 Masonry 1 CON/Q0101 Helper Mason L1

2 CON/Q0102 Assistant Mason L2

3 CON/Q0103 Mason General L4

4 CON/Q0104 Mason Tiling L4

5 CON/Q0105 Mason Concrete L3

6 CON/Q0106 Mason Marble, Granite and Stone

L4

7 CON/Q0107 Mason - Special Finishing L4

8 CON/Q0108 Mason Form Finished & Special Concrete

L4

9 CON/Q0109 Foreman Wet Finishing and Flooring

L5

10 CON/Q0110 Foreman - Concrete L5

11 CON/Q0111 Supervisor Structure L6

12 CON/Q0112 Supervisor Finishes L6

2 Bar Bending and Fixing

13 CON/Q0201 Helper Bar Bender and Steel Fixer

L1

14 CON/Q0202 Assistant Bar Bender and Steel Fixer

L2

15 CON/Q0203 Bar Bender and Steel Fixer L4

16 CON/Q0204 Reinforcement Fitter L4

17 CON/Q0205 Foreman Reinforcement L5

3 Shuttering Carpentry

18 CON/Q0301 Helper Shuttering Carpenter

L1

19 CON/Q0302 Assistant Shuttering Carpenter

L2

20 CON/Q0304 Shuttering Carpenter - System

L4

21 CON/Q0310 Shuttering Carpenter -Conventional

L4

22 CON/Q0306 Chargehand - Shuttering Carpenter -system

L4

23 CON/Q0311 Chargehand - Shuttering Carpenter- Conventional

L4

24 CON/Q0308 Foreman Formwork L5

4 Scaffolding 25 CON/Q0314 Assistant Scaffolder -system

L2

26 CON/Q0313 Assistant Scaffolder-conventional

L2

27 CON/Q0312 Scaffolder Conventional L4

28 CON/Q0305 Scaffolder - System L4

29 CON/Q0307 Chargehand Scaffolding - System

L4

30 CON/Q0309 Foreman - Scaffolding L5

5 Construction Electrical Works

31 CON/Q0601 Helper Electrician L2

32 CON/Q0602 Assistant Electrician L3

33 CON/Q0603 Construction Electrician - LV

L4

34 CON/Q0604 Foreman - Electrician works (Construction)

L5

35 CON/Q0605 Supervisor - Electrical Works

L6

6 Construction Painting

36 CON/Q0501 Helper Construction Painter

L1

37 CON/Q0502 Assistant Construction Painter & Decorator

L2

38 CON/Q0503 Construction Painter & Decorator

L3

39 CON/Q0504 Chargehand - Painting & Decorating

L4

40 CON/Q0505 Foreman - Painting & Decorating

L5

7 Quality Assurance and Quality Control

41 CON/Q0401 Helper - Laboratory and Field Technician

L2

42 CON/Q0402 Construction Laboratory & Field Technician

L4

43 CON/Q0403 Quality Technician L6

44 CON/Q0404 Construction UT Tester L3

45 CON/Q0405 Construction MPT Tester L3

46 CON/Q0406 Construction DPT Tester L3

47 CON/Q0407 Assistant Paint Inspector L5

8 Rigging 48 CON/Q0701 Khalasi (Assistant Rigger) L2

49 CON/Q0702 Rigger - Structural Erection L3

50 CON/Q0703 Rigger - Precast Erection L3

51 CON/Q0704 Rigger - Piling L4

52 CON/Q0705 Chargehand - Structural Erection

L4

53 CON/Q0706 Chargehand - Precast Erection

L4

54 CON/Q0707 Chargehand - Piling L4

55 CON/Q0708 Foreman - Erection L5

56 CON/Q0709 Supervisor - Erection L6

57 CON/Q0710 Supervisor - Piling L6

9 Fabrication 58 CON/Q1201 Helper Fabrication L1

59 CON/Q1202 Assistant construction Fitter

L2

60 CON/Q1203 Grinder- Construction L2

61 CON/Q1204 Gas Cutter- Construction L2

62 CON/Q1205 Construction Fitter L3

63 CON/Q1251 Tack Welder L3

64 CON/Q1252 Construction Welder MIG – L4

L4

65 CON/Q1253 Construction Welder TIG - L4

L4

66 CON/Q1254 Construction Welder SMAW - L4

L4

67 CON/Q1207 Plasma Cutter L4

68 CON/Q1206 Fabricator L4

69 CON/Q1208 Foreman Fabrication L5

70 CON/Q1255 Senior Construction Welder MIG – L5

L5

71 CON/Q1256 Senior Construction Welder TIG – L5

L5

72 CON/Q1257 Senior Construction Welder SMAW – L5

L5

73 CON/Q1209 Supervisor Fabrication L6

10 Prestressing 74 CON/Q0801 Assistant Technician - Prestress

L2

Sr. No.

Name of Trade Association

Equity Capital

Name of Directors from each Associations

1. Construction Federation of India

Rs. 15/- lakh Shri Ajit Gulabchand- Chairman Shri S.N. Subramanian

2. Builders Association of India

Rs. 20/- lakh Shri S.K. Basu Shri B. Seenaiah

3. Confederation of Real Estate Developers Association of India

Rs. 20/- lakh Shri C.K. Reddy Shri J.M. Thakkar

4. National Highway Builders Federation.

Rs 5 Lakh Shri V.C. Verma Shri S. Kuda

Total 60 Lakh

75 CON/Q0802 Technician - Prestress L4

76 CON/Q0803 Senior Technician - Prestress

L6

11 Surveying 77 CON/Q0901 Assistant Surveyor L2

78 CON/Q0902 Surveyor L6

12 Roads & Runway Construction

79 CON/Q1001 Assistant Pavement Layer L2

80 CON/Q1002 Pavement Layer L4

81 CON/Q1003 Foreman - Roads & Runways

L5

82 CON/Q1004 Supervisor - Roads & Runways

L6

13 Interior & Exterior Finishes

83 CON/Q1101 Helper Interior Finishes L1

84 CON/Q1102 Helper Façade Installer L1

85 CON/Q1103 Assistant False Ceiling and Drywall Installer

L2

86 CON/Q1104 Assistant Façade Installer L2

87 CON/Q1105 Doors & Windows Fixer L3

88 CON/Q1106 Façade Installer L3

89 CON/Q1107 False Ceiling & Dry Wall Installer

L3

90 CON/Q1108 Chargehand - Façade Installer

L4

91 CON/Q1109 Chargehand - False Ceiling & Drywall Installer

L4

92 CON/Q1110 Foreman - Facade Installation

L5

93 CON/Q1111 Foreman - False Ceiling and Dry wall Installer

L5

14 Draughting 94 CON/Q1301 Draughtsman L5

15 EHS 95 CON/Q1401 EHS Steward L4

96 CON/Q1402 Supervisor - Site EHS L6

16 Store Keeping 97 CON/Q1501 Store Assistant -Construction

L2

98 CON/Q1502 Junior Store Keeper -Construction

L5

99 CON/Q1503 Store Keeper -Construction L6

17 Masonry-Rural 100 CON/Q3603 Rural Mason L4

3) All these sanctioned curriculum are to be developed into a “Content Books”, which is mandatory for trainee, trainers and master trainer. Certificate to successful candidate issued by C.S.D.C.I. is recognised by National Skill Qualification Committee. Notification in this regard is issued by Joint Secretary to the Government of India, Ministry of Skill Development & Entrepreneurship and published in Gazette of India. Extra -ordinary Part I – Section 2 on 17-3-2015. This in effect means that certificate shall have pan India value.

4) C.S.D.C.I. has registered number of training providers, assessors and established or helped in establishing training centres at various places. Detail of as per table ‘A’ below:-

Financial year

Training centres in numbers

Registered training

providers

Number workers trained by T.P.

Registered assessors in

numbers

Number of workers

assessed by Assessor

Number of certificates

issued

2013-14 16 12 4856 63 614 569

2014-15 19 97 7769 26 7867 7912

2015-16 533 87 71597 110 55382 8588

2016-17 79 7 6921 4 3054 20072

TOTAL 647 203 91143 203 66917 37141

5) C.S.D.C.I’s financial performance is as under :-

Sr. No.

Financial year

Amount received from

NSDC / Government

Amount disbursed

to T.P.

Amount disbursed

to assessors

Deficit Surplus

1. 2013-14 32,000,000 136050 1723953 (1380738) -

2. 2014-15 - 2457658 8333873 (1625469) -

3. 2015-16 - 2705360 32227832 - 3530786

4. 2016-17 - 58400 11365548 - 911273

CONSTRUCTION SKILL DEVELOPMENT COUNCIL OF INDIA AFFILIATION CERTIFICATE VER 1.0 Builders Association of India G-1/G-20, 7

th Floor, Commerce Centre,

J. Dadajee Road, Tardeo, MUMBAI – 400 034 � (022) 23514802, 23514134, 23520507 (M) 9323576860

PROVISIONAL AFFILIATION CERTIFICATE: ASSESSMENT BODY 1. This is to inform you that documents submitted by you have

been found in order except the documents given below:-

(a) Submission of Application duly completed in all respect.

(b) Submission of list of CSDCI certified assessors, preferably ten. However, to start with minimum six CSDCI certified assessors are required.

(c) Submission of assessment methodology. (d) Submission of question bank of all job roles as applied

for. (e) Agreement between assessors and the affiliated body. (f) Payment of affiliation fee of Rs. 40,000/- after

conditions mentioned in para 1 (b) have been complied with.

2. Based on your documents, you are provisionally

affiliated as an Assessment Body with Construction Skills Development Council of India (CSDCI) for the job Roles as given in the MoU. However, it does not give you the authority to carry out assessment till conditions mentioned in para 1 above are complied and a certificate declaring you as an Assessment Body issued. The certificate issued will be valid for one year.

3. This provisional certificate is valid for three months

within which all the above conditions mentioned above have to be complied with.

Date: 02 July 2016 Place: New Delhi

Authorized Signatory Sd/- CEO, CSDCI

Construction Sector Skill Development Council - an update 1. Pradhan Mantri Kaushal Vikas Yojna 2.0 The PMKVY 2.0 was launched on 15.06.16. The new

scheme requires the training centres to be uploaded and approved through the SMART NSDC portal

(http://www.smartnsdc.org/) which is now active and ready. The training providers have been requested to start uploading the details on the portal, once approved and physically verified the training provider can upload data. During the soft launch CSDCI has received 4500 numbers for Asst. Electrician and Mason General job roles.

As per the guidelines, The SSC will get the assessment

fees paid only for the appeared candidates after the results have been uploaded and approved by the SSC on the SDMS.

2. PMKVY – Technical Institutes The National Steering Committee has sanctioned 1273

Polytechnics / Engineering college in 19 sectors with approved 80368 students in phase 1. As next step, the selected Polytechnics/ Engineering colleges have now asked to enrol the students as per the allocation and sanctioned trade/ QP. The data captured in the AICTE website will be merged into NSDC SDMS portal so that the assessment and certification by the respective SSC can happen seamlessly. In the first phase AICTE has approved construction QP mainly for concrete mason, general mason, Asst Laboratory Technician, Asst. Electrician etc, (NSQF level 3&4 only) and they are planning to train approximately 16000 in construction only in the first phase. The assessment and certification to be done by CSDCI and the certificate will bear AICTE &CSDCI logo. More on http://www.aicte-india.org/pmkvy.php

3. Ministry of Road Transport and Highways (MoRTH) National Highways and Infrastructure Development

Corporation is a fully owned company of the Ministry of Road Transport & Highways, Government of India. The company promotes, surveys, establishes, designs, builds, operates, maintains and upgrades National Highways and Strategic Roads including interconnecting roads in parts of the country which share international boundaries with neighbouring countries. CSDCI has signed a MoU with NHIDCL for implementation of the programme for 600 candidates as per the PMKVY 2.0 – Special Project guidelines for NE regions (Nagaland, Arunachal Pradesh, Guwahati and Assam). CREDAI National and Drishtee Skills (TPs) have submitted proposal for conducting training in these states.

4. Rural Housing – Ministry of Rural Development The Ministry of Rural Development (MoRD) has a

target of constructing 30 million houses upto FY 2022 on self-help basis. It envisages that the beneficiary and the local masons of the panchayat/block to be skilled and construct the houses on self-help basis. The mason is supposed to be multi skilled ie have skills in mason, bar bending, shuttering carpentry and plumbing. Accordingly, Construction Skill Development Council of India with support of MoRD developed a Rural Mason Qualification Pack (QP) which has been validated by 28 Sates and approved by the NSDC. It shall be put up to the National Skill Qualification Committee (NSQC), NSDA for approval to become a

national standard. The MoRD has also requested CSDCI to develop QPs for Rural Mason Level 2 &3. MoRD aims to construct 33 lacs houses under Pradhan Mantri Awaas Yojna (PMAY) in the current financial year. Statewise details are attached* for your perusal.

The model envisages selection of the Training Partners

through EOI, giving them a cluster of houses in a District, employ their certified Lead Trainers and Demonstrators for construction of the houses through local masons of the Panchayat and beneficiaries. The houses will be constructed in 45 days employing five masons and two beneficiaries. Post the construction of the houses all the masons and the beneficiaries will get assessed by the CSDCI certified assessors for which the assessment money will be paid from the PMAY funds. The payment to the TPs will be as per the common norms.

The role of the CSDCI is to build capacity of the

Trainers, Assessors and State Quality Control Organisations through ‘Train the Trainers Program’, get the trainees assessed by the CSDCI Assessment Bodies and certify them.

So far CSDCI has assessed 205 candidates in the States

of Jharkhand, Uttarakhand, Maharashtra, Chhattisgarh and Gujarat who had participated in the pilot phase. The States of MP, Odisha, Rajasthan, Assam and Punjab will be commencing the Pilot Project soon.

Handling this Project sensitively will give us inroads to

skilling the rural masons at the source and add huge numbers, which everyone is looking at. These will be outside the PMKVY.

5. State Engagements: a. Punjab State Skill Development Mission

(PSDM): CSDCI had signed a MOU with PSDM last year, Through the BOCW fund, the first batch of 30 is getting assessments under the RPL programme.

b. Madhya Pradesh Council for Vocational

Education and Training (MPCVET): MPCVET had enrolled 6300 candidates under the RPL programme last year. The CSDCI has assessed 5000 candidates; the certificates of the passed candidates (2650) are under the process of generation.

c. Advanced Skill Acquisition Programme

(ASAP): The state of Kerala under the ASAP mission has enrolled 590 candidates who are now ready for assessments and certification.

6. Industry Engagements: MOUs have been signed with the following

organisations as Associate CSDCI Partners. a. NAREDCO b. Saint Gobain

c. Ambuja Cements d. Kushal Credai e. Stellar Group f. Oriental Structures We seek support of our Promoters like BAI for reaching

the goal of 500 industry members. 7. International Engagements a. UK-India Research Initiative(UKIERI) -2.0: A

proposal has been submitted for benchmarking five job roles with our standards.

8. Operations Brief a. Training of Trainers/ Assessors Courses: 20

Train the Trainers /Assessors program as against 11 courses conducted last year. The details are:

i. Nominations: 419 ii. Certified Trainers:91 iii. Certified Assessors:75 iv. Demonstrators (Rural mason) :33 b. UP – Job Melas: All the SSCs are participating in

various commissionaires of the UP for job melas in November 2016. It entails gathering of the certified candidates and connect them with the employers. We will be participating in four Job Melas in UP in Gonda, Gorakhpur, Noida and Ghaziabad commissionaires.

c. PMKVY Stand-alone Centres – 42 Centres have

been identified as PMKVY 2.0 standalone centres; out of these 38 are ready for inspection. These will act as Hub for the identified commissioners and will help in deeper penetration of the region through the Spokes.

d. Centres of Excellence: Under the World Bank

Project, every SSC is expected to set up a Centre of Excellence (CoE). This has to be a state of the art facility, which not only functions for training of trainers and assessors but also acts as a experimentation ground for new job roles, new technologies that need to be introduced in the skill ecosystem in that sector.

e. Non PMKVY: Over 15000 enrolments have been

done under various programmes like DDUGKY, NULM, CSR and Non PMKVY.

f. MOUs Following MOUs have been signed: i. Jharkhand State Skill Development Mission ii. National Highway Infrastructure and

Development Corporation (NHIDCL) g. Audio Visual film: The film has been completed

and is submitted to NSDC. CSDCI has registered a number of Training Providers, Assessors and established or helped in establishing Training Centres at various places, details of which are given below.

Sr. No.

Financial year

Training Centres

in numbers

Registereed taaining proiders

Number of

workers trained by T.P.

Registered assessors

in numbers

Number of certificates

issued

1 2013-14 16 12 4856 63 569

2 2014-15 128 97 11490 26 7912

3 2015-16 597 197 77286 111 35332

4 2016-17 158 27 14223 76 3750

TOTAL 899 333 107855 276 47563

LABOUR LAW MATTERS (i) PROVIDENT FUND MATTERS Union Ministry of Labour & Employment has introduced a ‘EPF Amnesty Scheme for Companies’ vide its Notification dated 30th December 2016. We are printing herein below the said notification. The salient features of the Notification can be summarised as under:- a) Companies which have not enrolled their employees as

members under the Employee Provident Fund (EPF) scheme will now get a chance to do so, against payment of a minimal damage fee of Rs.1/- per year of default.

b) Additionally, if the employee wasn't enrolled earlier and his/her share of contribution was not deducted from salary, the employer company had to pay this sum also in addition to the past defaults of its own contribution. Now under the amnesty scheme, only the employer's contribution has to be deposited.

c) The objective of the amnesty is to ensure enrolment of employees and spread the benefit of the EPF scheme. Companies having 20 or more employees are required to mandatorily enrol those employees under the EPF scheme who have a salary of up to Rs 15,000 per month. The EPF scheme is optional for those drawing a higher salary. However, once an employee opts for the scheme, he or she cannot opt out.

d) Both the employer and employee are required to contribute 12% per month towards EPF against the employee's basic salary plus dearness allowance. However, under the amnesty, interest at the rate of 12% on the amount due for delayed deposit of the contribution will be payable for the period of delay. This amnesty scheme, which comes into force from January 1, is open until March-end. "The main purpose of the amnesty is to expand coverage of the EPF scheme," said a government official.

e) "Companies that had not enrolled employees under the EPF scheme for the period beginning April 1, 2009 to December 31, 2016 can take advantage of the amnesty scheme by making a declaration to the regional employee provident fund office."

f) "The employer will be required to deposit the required

sum, which denotes its share of contribution, employee's

share of contribution only if deducted from employee's salary but not deposited, interest and a nominal damage charge within 15 days of making the declaration. The biggest largesse under the amnesty is that the company doesn't have to make good the share of the employee's contribution."

MINISTRY OF LABOUR AND EMPLOYMENT NOTIFICATION

New Delhi, the 30th December, 2016 G.S.R. 1190(E).— In exercise of the powers conferred by section 5 read with sub-section (1) of section 7 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), the Central Government hereby makes the following Scheme further to amend the Employees’ Provident Funds Scheme, 1952, namely:–– 1. (1) This Scheme may be called the Employees’ Provident Funds (Seventh Amendment) Scheme, 2016. (2) It shall come into force on the 1st day of January, 2017 and shall cease to operate on the 31st day of March, 2017, except as respects things done or omitted to be done before such cessation. 2. In the Employees’ Provident Funds Scheme, 1952, after paragraph 82, the following paragraph shall be inserted, namely:––

“82A. Special provision in respect of Employees’ Enrolment Campaign, 2017.––(1) The Employees’ Enrolment Campaign, 2017 shall come into force on the 1st day of January, 2017 and shall cease to operate on the 31st day of March, 2017. (2) Every employer who has failed to comply with the

provisions of this Scheme in relation to membership of employees and contribution thereto to the Fund, shall furnish a declaration in such Form as may be specified by the Central Provident Fund Commissioner, in respect of membership of the employees, who were required or entitled to become members of the Fund for the period beginning the 1st day of April, 2009 and ending the 31st day of December, 2016 but were not enrolled as members for any reason, to the Regional Provident Fund Commissioner.

(3) The employer shall, within fifteen days from the date

of furnishing the declaration referred to in subparagraph (2), remit the employer’s contribution payable in accordance with the provisions of this Scheme and the employee’s contribution deducted from the employee’s wages along with interest payable in accordance with section 7Q of the Act and damages :

Provided that employer shall not be required to pay the employee’s contribution if the same has not been deducted from the wages of the employee.

(4) The employer shall, after complying with sub-

paragraph (2) and sub-paragraph (3), file a return in such form as may be specified by the Central Provident Fund Commissioner, to the Regional Provident Fund Commissioner.

(5) The employer shall specify the date of eligibility in

respect of each employee for membership in the declaration referred to in sub-paragraph (2):

Provided that such declaration shall be valid only in respect of employees who are alive as on the 1st day of January, 2017 and no proceedings under section 7A of the Act or under paragraph 26B of this Scheme or under paragraph 8 of the Employees’ Pension Scheme, 1995 have been initiated against their establishment or employer, as the case may be, to determine the eligibility for membership of such employees.

(6) If the employer fails to remit the contribution, interest

and damages payable by him as referred to in sub-paragraph (3), then, the declaration sent by the employer under sub-paragraph (2) shall be deemed to have not been made by such employer under this Scheme.

(7) Where a declaration under sub-paragraph (2) has

been made by misrepresentation or suppression of facts, such declaration shall be void and shall be deemed to have not been made under this Scheme and the person making such declaration shall be liable to penal action in accordance with the provisions of the Act and the Schemes made thereunder.

(8) The exceptions and modifications subject to which

the provisions of this Scheme shall apply, in relation to the employees’ whose membership have been declared under sub-paragraph (2) as per the Employees’ Enrolment Campaign, 2017, shall be as follows, namely:––

(a) in paragraph 30, after sub-paragraph (1), the following proviso shall be inserted, namely:––

“Provided that, for the purpose of increasing coverage and extension of benefits under the Act and Schemes made thereunder, the member’s contribution is waived under Employees’ Enrolment Campaign, 2017 for the period beginning the 1st day of April, 2009 and ending the 31st day of December, 2016 :

Provided further that such waiver shall be applicable only if the member’s contribution has not been recovered from such member’s wages.”.

(b) in paragraph 32-A, in sub-paragraph (1), for the Table, the following Table shall be substituted, namely:–

TABLE

(Applicable for remittances in respect of valid declarations under Employees’ Enrolment Campaign, 2017)

Period of default Rate of damages (1) (2)

Between the 1st day of April, 2009 to the 31st day of December, 2016.

One rupee per annum.”.

(c) for paragraph 39, the following paragraph

shall be substituted, namely:––

“39. Fixation of administrative charges.––The administrative charges payable under Employees’ Enrolment Campaign, 2017 for the period 1st April, 2009 to the 31st December, 2016 under sub-paragraph (1) of paragraph 38 shall be nil.”.

[F. No. S-35012/13/2016-SS-II]

R. K. GUPTA, Jt. Secy.

Note: The principal scheme was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification number S.R.O. 1509, dated the 2nd September, 1952 and was lastly amended vide

notification number G.S.R. 1065(E), dated the 11th November, 2016.

EMPLOYEES’ PROVIDENT FUND ORGANISATION (Ministry of Labour & Employment, Govt. of India)

Head Office Bhavishya Nidhi Bhawan, 14, Bhikaji Cama Place, New Delhi - 110

066 No. letter No. C-111/110001/4/3(71) Misc/2013/DL/Vol.11/21830

Dated: 22.01.2016

To, All Regional PF Commissioners, In-charge of Regions/Sub-Regional Offices,

Sub.: Coverage of construction workers under EPF & MP Act, 1952 - reg. Madam/Sir, Please refer to HO Circular No. C-111/110001/4/3(71) Misc/2013/DL/27618 dated 15.10.2015 and No. 21432 dated 18.01.2016 regarding coverage of construction workers under the EPF & MP Act, 1952 and registration on UAN platform. In this regard, it is informed that the matter is being monitored at the highest level in government and this is an area flagged

as of utmost concern. Head Office has been continuously issuing instruction and guidelines on the matter. Thus it becomes imperative that this work is accorded top priority and taken up in right earnest, duly engaging all the stake holders, including the various Trade Unions and Industry Associations/Bodies, BOCW Board of the State Secretary Labour & Employment has already written to the Chief Secretaries of all states to extend cooperation in this regard. It is requested to kindly ensure that the matter of enrollment of construction workers and allotment and activation of UAN receives the personal attention of Officer In-charge. A consolidated report on the action taken so far may be forwarded to Head Office as per the enclosed format through ACC (Zone) on [email protected] within next 7 days for further action at this end.

Kindly consider it urgent and important Yours faithfully,

(Gautam Dixit) Regional PF Commissioner-I (Compliance)

Copy to:- 1. PS to CPFC/ACC (HQ)/FA&CAO/CVO - for kind

information. 2. All ACC (Zones) for information & with the request to

ensure submission of the required report Zone-wise. 3. RPFC (NDC) for webposting. 4. (OL) for Hindi version. Rs 43,000 crore lies in inoperative EPF accounts: GoI About Rs 43,000 crore is lying in inoperative Employees' Provident Fund accounts and interest would be credited to such accounts, government of India said on Monday. Minister of state for labour and employment, Bandaru Dattatreya told Lok Sabha that 118.66 lakh claims were settled by the Employees' Provident Fund Organisation (EPFO) in 2015-16, adding that 98 per cent of them were settled within 20 days. "There is around Rs 43,000 crore in inoperative (EPF) accounts," Dattatreya said during Question Hour. Listing the steps taken, the minister said it has been recently decided to credit interest to the inoperative accounts. Emphasising that there is a lot of confusion about inoperative and unclaimed accounts, he said that the government has launched the initiative for one member, one EPF account. EPFO has allotted Universal Account Number (UAN) for portability and consolidation of all previous accounts. In 2015-16, 118.66 lakh claims were settled by the EPFO while the numbers stood at Rs 130.21 lakh and Rs 123.36 lakh in 2014-15 and 2013-14, respectively. According to the minister, Rs 1.18 lakh claims were pending for settlement in 2015-16.

He also said that prosecution would be initiated against those violating EPFO norms. Responding to supplementaries regarding the unorganised sector, Dattatreya said that the government has given priority to construction workers in this segment. They would be given UAN so that they can avail the benefits, he added. Besides, pilot projects would be started in Delhi and Hyderabad for auto-rickshaw drivers and rickshaw pullers, the minister said. Dattatreya said that the priority would be for anganwadi, mid-day meal scheme and Aasha workers. He said Online Transfer Claim Portal has also been introduced. Further, Dattatreya said employees whose Aadhaar or Permanent Account Number (PAN) have been seeded in their UAN and activated by their employers, may submit claim forms directly to the EPFO without attestation of their employers.

BAI achieves breakthrough in Supreme Court

Background of Supreme Court Judgement on PF

BAI Delhi Centre filed Civil Writ Petition No. 3588 of 2002 in

Delhi High Court, praying inter alia for a writ of mandamus

directing EPF authorities to evolve a modified scheme and

implement it and create a mechanism for this purpose. By an

order dated 29.08.2014, learned single judge dismissed the

Writ Petition. Being aggrieved by the said order, BAI Delhi

Centre filed Letter Patent Appeal (LAP) No. 728 of 2014

before a Division Bench of Delhi High Court. This was also

dismissed by the Division Bench on 16.10.2015. BAI filed a

Special Leave Petition (SLP) No. CC 8035 of 2016 in Supreme

Court against the order of Divisional Bench, along with

request for condonation of delay. The matter was heard on

02.05.2016 and the Write Petition was disposed off by the

Hon'ble Supreme Court.

Main Points of SLP filled before the Hon’ble Supreme Court against the judgment on order dated 16.10.2015 of the Delhi High Court in LPA No. 727 of 2014. 1. This SLP seeks enforcement of a mandatory direction

given by a Division Bench of the Delhi High Court in a Writ Petition on 2.5.1995 in terms of which the liability to deduct employees’ contribution to the Provident Fund would commence only after the Respondents complied with the Scheme as modified having regard to the suggestions made by the Court during the pendency of the Writ Petition filed by some members of the Petitioner Association. The Respondents complied with the Scheme only in the year 2014 after the lapse of about 19 years. Now they are initiating proceedings for recovery of the wages not deductable in terms of the High Court order for the period prior to 2014. The liability sought to be imposed is without the authority of law.

2. In 1991, twenty four members of the Petitioner Association approached the High Court of Delhi by filing CWP No. 792 of 1991 challenging the vires of the Notification dated 19.10.1990 issued by the Government of India in exercise of its powers conferred by Sec. 5 read with Sec. 7(1) of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 containing a Provident Fund Scheme for the benefit of employees in factories or other establishments in terms of which a certain percentage of wages payable to each employee was required to be deducted by the employer and deposited with the Provident Fund Authorities irrespective of nature and duration of employment. As the Scheme was prima facie defective, on 13.3.1991 a Division Bench of the Delhi High Court was pleased to issue Rule and grant interim stay of the Notification. On 23.10.1991, the Division Bench recorded the statement of the Respondents, namely the Union of India, the Chief Provident Fund Commissioner and Regional Provident Fund Commissioner that they were willing to modify the Scheme so as to make it less cumbersome for the beneficiaries to obtain the amount of Provident Fund and make the Scheme workable.

3. Subsequently the Respondents filed an Affidavit proposing to issue passbook to every employee which was not accepted by the Division Bench, because in the very nature of things a migrant labourer would not be able to withdraw the money due to him.

4. On 27.11. 1991, the Division Bench directed the Respondents to consider the problem and to file an effective proposal for modifying the abovementioned scheme. In their Affidavit dated 22.5.1992, the Respondents stated that they had formulated a revised accounting procedure with respect to the peripatetic employees of the Construction Industry and annexed the minutes of meeting of the Central Board of Trustees with whom the funds are vested. Under the revised formulation, the employee would be given a permanent number of ten digits which will help him to receive the benefit under the Scheme eventually wherever he may be.

5. By an order dated 2.5.1995, a Division Bench of the High Court while vacating the order of interim stay, issued the following direction: “We however, direct that on Respondents 1 and 2

complying with modified Scheme the Petitioner shall

deduct the Provident Fund and deposit the same with

Respondent No. 1 and 2 in respect of casual workers

also.”

This direction was not subsequently modified. The compliance took place only in the year 2014 when the Respondents allotted permanent numbers to each construction company or building contractor for distribution to their employees from 2014 in terms of the order dated 2.5.1995, the members of the above Petitioner Association have been deducting the contribution of employees and depositing the amount with the Respondents.

6. In violation of the direction given by the Division Bench on 2.5.1995, the Respondents have started initiating action under Section 7 (a) of the Act for recovery of the employees’ contribution for the period prior to 2014 when there was no liability on the part of the employer including members of the Petitioner Association to deduct and deposit the amount with the Respondent towards Provident Fund. The Petitioners therefore filed CWP No. 3588 of 2002 in the Delhi High Court praying inter alia for a writ of mandamus directing the Respondents to evolve a modified Scheme and implement it and create a mechanism for this purpose. By an order dated 29.8.2014, a learned Single Judge dismissed the Writ Petition. On 16.10.2015, a Division Bench of the High Court was pleased to dismiss the LPA No. 727 of 2014 preferred by the Petitioners herein. Hence this SLP.

7. It may be stated that because of the faulty Scheme, amounts deducted and deposited with the Respondents by some other builders have accumulated to the tune of Rupees Twenty six thousand crores as per the balance sheet of the concerned Provident Fund Authority, as beneficiaries of the Scheme were not able to receive their Provident Fund due.

8. The Scheme which was intended to provide social security for employees has turned out to be for the benefit of the Respondents.

9. This Special Leave Petition merits consideration in general public interest.

Ref: 214/J/2016-17 dated 27th July 2016 To, The Hon’ble Minister of Labour & Employment Government of India, Shram Shakti Bhavan, NEW DELHI Respected Sir, Sub:- Applicability of Employee Provident Fund Scheme

to Construction Workers. Builders’ Association of India (BAI) is an apex all India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 16,000 business entities as members through its 156 plus Centres (Branches) throughout the country. Regional Associations Affiliated to BAI form indirect membership of more than 1,00,000. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as policy level problems faced by the construction industry. This involves making efforts to obtain from policy makers and authorities, the level of attention that the construction industry deserves in

view of its tremendous contribution and importance to the economy. At the outset, we express our sincere gratitude to you and to the Hon’ble Prime Minister of India for launching ‘Universal Account Number (UAN)’ on 14th July 2014 to all Employees’ Provident Fund Subscribers. Operation of UAN number will not only serve as a unique identification number but also will help the beneficiary of Provident Fund Scheme to avail various facilities. Sir, issue of UAN number will be more helpful to the Construction Industry as it will help in identifying the construction workers who are mainly consists of peripatetic and casual in nature. It is also admitted fact that, after issuance of UAN number, there is a marked increase of coverage of construction workers in E.P.F. Scheme as both the contractors and the workers are now ensured of receiving the benefit. Sir, some of the members from Southern part of the country have reported to us that, Provident Fund officials visit their sites and insist for covering the construction workers by assessing the Provident Fund contribution from the Balance Sheet. In this regard, you also appreciate the fact that, the Hon’ble Supreme Court in its order dated 2nd May 2016 emphasised the requirement of identifying the workers for receiving the benefits before deducting such contribution. In addition, there are certain irritants in better implementation of Act, stated as below :- a) As per para 80 of EPF Rules, Newspaper employee and

cine workers are having similar working conditions. Despite this Newspaper employees are granted a qualifying period of three months continues working with one establishment for becoming a P.F. beneficiary.

b) As per para 81 of EPF Rules, Cine workers are given a qualifying period of completing not less than three feature film with one or more producers for becoming a P.F. beneficiary.

In view of above, BAI request your Honour to :- i. Implementation of Act to construction site workers be

made effective from 14.7.2014 (the date when UAN is launched) for better implementation of scheme by ensuring that P.F. benefit reaches to them.

ii. Construction workers be treated at par with cine workers & News paper employee by giving three months qualifying period to become beneficiary for P.F. Scheme.

Thanking you.

Yours truly,

AVINASH M. PATIL


Copy to :

1) Mr. Shankar Agarwal, I.A.S., Secretary, Ministry of Labour & Employment, Government of India, Shram Shakti Bhawan, Rafi Marg, New Delhi - 110 001.

2) Dr. V. P. Joy, I.A.S.,

Central Provident Fund Commissioner, Employees Provident Fund Organisation, Bhavishya Nidhi Bhawan, Bhikaji Cama Place, New Delhi – 110 066.

(ii) ESIC MATTER Union Ministry of Labour & Employment Government of India vide its Official Gazette Notification dated 22nd December 2016 enhanced the wage limit from Rs.15,000 to Rs.21,000 for covering workers in ESIC Scheme. The notification will be effective from 1st January 2017. BAI immediately took up the matter with the Ministry raising concerns of the construction industry. We are printing herein below the said notification and the letter written by BAI President.

MINISTRY OF LABOUR AND EMPLOYMENT

NOTIFICATION

New Delhi, the 22nd December, 2016

G.S.R. 1166(E).—Whereas certain draft rules further to amend the Employees’ State Insurance (Central) Rules, 1950 were published in the Gazette of India, Extraordinary, Part-II, section 3, sub-section (i) vide number G.S.R. 957(E), dated the 6th October, 2016, as required by sub-section (1) of section 95 of the Employees’ State Insurance Act, 1948 (34 of 1948), inviting objections and suggestions from all persons likely to be affected thereby before the expiry of a period of thirty days from the date on which the copies of the Official Gazette in which the said notification was published were made available to the public; And whereas, the copies of the said Official Gazette were made available to the public on the 6th October, 2016; And whereas, objections and suggestions received from persons likely to be affected thereby have been considered by the Central Government; Now, therefore, in exercise of the powers conferred by section 95 of the said Act, the Central Government, after consultation with the Employees’ State Insurance Corporation, hereby makes the following rules further to amend the Employees’ State Insurance (Central) Rules, 1950, namely:-

1. (1) These rules may be called the Employees’ State Insurance (Central) Third Amendment Rules, 2016. (2) They shall come into force from 1st day of January, 2017.

2. In the Employees’ State Insurance (Central) Rules, 1950, in rule 50, for the words “fifteen thousand rupees” occurring at both the places, the words ‘twenty one thousand rupees” shall be substituted.

[F. No. S-38012/02/2013-SS-I]

RAJEEV ARORA, Jt. Secy.

Note: The principal rules were published in the Gazette of

India vide notification number S.R.O. 212 dated the 22nd June, 1950 and lastly amended vide notification number G.S.R. 959(E), dated the 6th October, 2016.

Nishok Kumar Paria

Digitally signed by Nishoke Kumar Paria Date: 2016.12.26 19:52:40

+05’30’

No.BAI/DO/03/2017 13th February, 2017 To Mrs. Satyawati , Hon’ble Union Labour Secretary Ministry of Labour & Employment, Shram Shakti Bhawan, Rafi Marg New Delhi-110001 Respected Madam,

Subject: BAI’s representation on ESI Coverage to Construction Sites and Benefits under ESI Act Vis A Vis

BOCW Act. Builders’ Association of India (BAI) is an apex all India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 16,000 business entities as members through its 160 plus Centres (Branches) throughout the country. Regional Associations Affiliated to BAI form indirect membership of more than 1,00,000. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as policy level problems faced by the construction industry. This involves making efforts to obtain from policy makers and authorities, the level of attention that the construction industry deserves in view of its tremendous contribution and importance to the economy. At the outset, we welcome the decision of the apex body of the ESIC to provide the ESI Facilities for construction workers thereby enabling them to avail benefits of complete medical care from primary to tertiary medical care as well as range of cash benefits in times of exigencies of employment injury, death, disablement & employment. The construction workers

are considered to be part of un-organised sector but keeping in view the fact that they are highly prone to accidents, sickness etc. the ESIC has decided to go ahead for extending the coverage of RSIC Social security to them. Construction activity has been covered by the ESIC under sec 1(5) treating them as commercial establishment. The coverage under ESIC to a construction site will be extended u/s 2(12) also, if in any part of the construction unit, manufacturing process as defined under Factory act is carried on. The ESI Corporation vide press release dated 17th July & 23re July `2015 made a declaration that they intend to cover the construction site under the provisions of ESI Act which was not the case till then in view of the guidelines issued by ESI in 1999. The ESI Corporation also came out with a circular dated 31st July `2015 about the same & in fact to override the notification issue of promulgation, they came out with the plea of interpreting the guidelines issued them in 1999 & stated that [quote from circular point no (1]) “All the construction agencies which have already been covered u/s 1 (5) ,their site workers also be covered & other construction agencies which may now come under coverage by adding construction site workers. Difficulties in Implementation :- ESI Act is essentially for organised work force, inspite of the term otherwise in Sec 1(4). Payment of contribution, submission of returns, reporting of accidents, submission of returns,& many other formalities would show that that the scheme is employee centric. Yet the ESIC could not extend the scheme to construction sector because of many practical considerations. That precisely was the reason for so many tripartite talks in decades. Summary of those facts have been recorded in the Annual standard Notes also. Few of the additional points which need to be clarified /discussed with the authorities are cited below as they are in conflict with the circular issued.

1) The ESI Act is a statute which is applicable by the appropriate Government on the basis of the Gazette Notification issued for Coverage. In the present case no notification has been issued as yet.

2) As the Construction Site is neither a “FACTORY” nor “COMMERCIAL ESTABLISHMENT”, hence do not come under the definition of ESI Act as the said Act is only applicable on the aforesaid.

3) Since the ËSTABLISHMENT” Is covered under BOCW Act, then the office of the Construction Site can be termed as establishment only under BOCW Act which means “Any establishment -----------who employs building workers in any building or other construction works---------“. Such establishments are covered under BOCW Act & not under Shop & Commercial Establishment Act.

4) As per the OBJECTS & REASONS of the BOCW Act,1996 it clearly lays down the “Application of the Workmen Compensation Act to building & other Construction Workers ‘.This being a subsequent legislation for the health,

Safety & Welfare benefits pertaining to Building/ Construction Workers the provisions of the said Act would override the provisions of the other Acts wherever there arises a conflict & interpretation. Thus there cannot be two interpretations of as the legislature thought it fit to cover Building & other Construction Workers under Workmen Compensation Act & not otherwise. Such a beneficial piece of legislation has to be construed in its correct perspective so as to fructify the legislative intention underlying its enactment. The Apex Court has rightly held in number of cases that when two views are possible on its applicability to a given set of employees, that view which furthers the legislative Intention should be preferred to the one which frustrate it.

5) Sec 58 of BOCW Act also states that “the provisions of Workmen Compensation Act, 1923 shall apply to building workers as if the employment to which this Act applies had been included in the second schedule to that Act”.

6) Employees Compensation Act,1923 Schedule II defines list of employees who, subject to the provisions of [Section 2(1)(DD) ] ARE INCLUDED INTHE DEFINITION OF [EMPLOYEES] that is to say any person ---- (viii)“employed in the construction, maintaince, repair or demolition of---

a) Any building which is designed to be or is or has been more

than one storey in height above the ground or twelve feet or more from the ground level to the apex of the roof; or

b) Any dam or embankment which is twelve feet or more in height from its lowest to its highest point; or

c) Any road ,bridge, tunnel or canal; or

d) Any wharf, quay, sea-wall or other marine works including any moorings of ships ;

7) The BOCW Welfare Cess Act Lays down the payment for

Corpus to be maintained for Welfare Board. Thus when the Building workers are to be covered under ESI ACT THEN WHAT PURPOSE THE Cess remains & for what purpose the welfare Board would be required to collect the money because the workers would be entitled to benefits under ESI Act. Further the question arises that whether the statute passed by an Act of Parliament can be subrogated by issuance of Circular?

8) It is also to be noted that whether the practise of registering the Building workers would be continued or there shall be no more Registration under welfare Board. If that be the case then how come the benefits would be passed on by the welfare Board to the Building workers & whether that would not amount to taxing the Employer twice for the same contract?.

9) As per Regulation 4 of the ESI Regulations 1950 which provides for Contribution & Benefit period. The benefits being passed on to the Insured person for the first time would be only after nine months as corresponding Contribution & Benefit period are different. For eg. The Person being registered in the Contribution period for the first time in April can avail the benefits from following January & not before.

Similarly for availing sickness benefit the Insured person has to pay minimum contribution for 78 days in a contribution period otherwise the benefit cannot be availed & is foregone.

10) Benefits being provided under the Construction Welfare Board are in few cases more than prescribed under ESI Act. For availing the benefits under BOCW Act a nominal amount of contribution (@Rs 25/-pa (presently applicable in Delhi for coverage under Delhi Construction welfare Board) is paid by the Beneficiary for availing the benefits provided by the Construction Welfare Board. The benefits being paid are in few cases for Natural death, self marriage, children marriage etc. (which is not covered under ESI Act) apart from skill development benefits in the form of financial assistance to such beneficiaries.

11) As per Regulation 103-B an Insured person shall continue to receive medical benefit for himself & his / her spouse till the date on which he would have vacated the employment on attaining the age of superannuation had he not sustained such disablement if he produces a certificate from the employer. This is not practicable as the employees at the construction site are engaged for the period of contract awarded which is time specific ,hence the Employer cannot provide certificate for such person till the age of superannuation, therefore in the absence of that certificate his claim would be discontinued.

BAI’s PROPOSAL :- At this juncture we should not forget about the view propounded by Prof Adharkar, the visionary who was instrumental in bringing the concept of ESI at the very beginning. Prof. Adharkar has rightly said that when a scheme is proposed it must be workable in the “peculiar circumstances of Indian labour & Industry”. So, if necessary a separate structure may be evolved the way it was done in late nineties for cashew workers in Kerala. The scheme was ultimately discontinued by ESIC. The documents that show why that scheme meant for cashew workers had been dispensed with may also be gone through, in the present context. Otherwise it will be meeting the same fate as has happened in the Medical college matter where ESIC is hell bent on medical colleges when they know that their financial position would nose drive very seriously in the year 2016-2017 if they continue to run them?. The proposals being put forth are in tune with the views of the ESIC, as can be evident from the points elaborated below.

1) Recommendations of the Conference Committee on social security for Organised, Unorganised & Migrant International Workers held at Vighyan Bhawan Hall no 4 on dated 21.07.2015 contains other recommendations particularly relating to for Construction Workers ,there should be single Contribution from Employer ( Point no XI ).

2) As per the recommendations that ESIC should be expanded at a fast pace & the ESIC should directly run the health services at all the states. Further ESI coverage for round the clock medical benefits. (Point no VII c,d &f ) .

3) The ESIC vide press release dated 7thApril`2015 discusses amendment in the ESI Act ,1948 for providing option to employees to choose either ESI or Health Insurance product services recognised by IRDA in 165th Meeting of the ESI Corporation held on 7th April `2015.This option will not only provide the facilities to the door steps of the workers but would also help the employers from unnecessary paper documentation as all the workers engaged at the site can avail the facilities from single source. This would also not only be an effective mechanism but would also be rid of the bureaucratic hassles. The nitty gitty of the scheme may be changed depending upon the discussions with the stakeholders as on one side it will leave the government from day to day monitoring & maintaining a workforce to maintain records while on the other it will also provide leverage to the employers to have a common scheme for all the employees engaged at the site without any worry of the wage ceiling or see if the area is coming in implemented / non implemented area. Now let us dwelt on the benefits prescribed under ESI Act vis a vis BOCW ACT & in brief the details are as under ;-

Comparison Statement of ESIC and BOCW ACT

Benefits & Contributory Conditions UNDER ESI ACT:

Benefits & Contributory Conditions UNDER BOCW ACT:

An interesting feature of the ESI Scheme is that the contributions are related to the paying capacity as a fixed percentage of the workers wages, whereas, they are provided social security benefits according to individual needs without distinction. Section 46 of the Act envisages following six social security benefits :- (a) Medical Benefit : Full medical care is provided to an Insured person and his family members from the day he enters insurable employment. There is no ceiling on expenditure on the treatment of an Insured Person or his family member. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs.120/- (b) Sickness Benefit(SB) : Sickness Benefit in the form of cash compensation at the rate of 70 per cent of wages is payable to insured workers during the periods of certified sickness for a maximum of 91 days in a year. In order to qualify for sickness benefit the insured worker is required to contribute for 78 days in a contribution period of 6 months. 1.Extended Sickness Benefit(ESB) :

Section 12 (1) of the BOCW Act “ every building worker who has completed eighteen years of age ,but has not completed sixty years of age ,& who has been engaged in any building or other construction work for not less than ninty days during the preceding twelve months shall be eligible for beneficiary under this Act.” Section 12(2) says that “every application shall be accompanied by such documents together with such fee not exceeding fifty rupees as may be prescribed.” Section 11 lays down that ‘ subject to the provisions of this Act,every building worker registered as a beneficiary under this Act shall be entitled to the benefits provided by the Board from its fund under this Act. Section 22 lays down functions of the Board :- (1)The Board may:-

a) Provide immediate assistance to a beneficiary in case of a accident. b) Make payment of pension to the beneficiaries who have completed the age of sixty years. c)Sanction loans & advances to a beneficiary for construction of house not exceeding such amount & on such terms & conditions as may be prescribed; d)Pay such amount in connection with premia for Group Insurance Scheme of the beneficiaries as it may deem fit;

SB extendable upto two years in the case of 34 malignant and long-term diseases at an enhanced rate of 80 per cent of wages. 2.Enhanced Sickness Benefit : Enhanced Sickness Benefit equal to full wage is payable to insured persons undergoing sterilization for 7 days/14 days for male and female workers respectively. (c) Maternity Benefit (MB) : Maternity Benefit for confinement/pregnancy is payable for three months, which is extendable by further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding year. (d) Disablement Benefit : 1.Temporary disablement benefit (TDB) : From day one of entering insurable employment & irrespective of having paid any contribution in case of employment injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long as disability continues. 2.Permanent disablement Benefit (PDB) : The benefit is paid at the rate of 90% of wage in the form of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical Board (e) Dependants' Benefit(DB) : DB paid at the rate of 90% of wage in the form of monthly payment to the dependants of a deceased Insured person in cases where death occurs due to employment injury or occupational hazards. (f) Other Benefits : Funeral Expenses : An amount of Rs.10,000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment. Confinement Expenses : An Insured Women or an I.P.in respect of his wife in case confinement occurs at a place where necessary medical facilities under ESI Scheme are not available. In addition, the scheme also provides some other need based benefits to insured workers. Vocational Rehabilitation : To permanently disabled Insured Person for undergoing VR Training at VRS. Physical Rehabilitation : In case

e)Give such financial assistance for the education of children of the beneficiaries ass may be prescribed; f) Meet such medical expenses for treatment of major ailments of a beneficiary or such dependants as may be prescribed; g) Make payment of maternity benefits to the female beneficiaries; and h) Make provision & improvement of such other welfare measures & facilities as may be prescribed. As per the Delhi Construction Welfare Board which is functioning , under the aegis of Delhi government, the following benefits are mentioned on the registration card of the construction workers registered at the Board are being provided by them to the registered workers ;- 1) Old Age pension. 2) Family pension. 3) Disablement assistance & pension 4) Housing loan for construction & purchase. 5) Scholarship for children 6) Loan for purchase of Tools 7) Assistance for marriage 8) Medical assistance 9) Medical assistance in case of accident 10) Maternity benefits 11) Funeral expenses 12) Assistance in case of death 13) Other benefits being in vogue by the Board. In the last hearing at the Delhi High Court the Hon`ble Court was very particular about the benefits being provided to the construction workers engaged at the site & therefore has impleaded Delhi Construction Welfare Board as an additional party & asked them to file an affidavit in detail the steps taken by them for the welfare of Construction workers. Reference is also cited of the two Supreme court judgments the details in brief are as under :- 1)In Regional Director, Employees State Insurance Corporation, Trichur v. Ramanuja Match Industries , the Court pointed out that “there is no doubt that beneficial legislations should have liberal construction with a view to implementing the legislative intent but where such beneficial legislation has a scheme of its own there is no warrant for the Court to travel beyond the scheme and extend the scope of the statute on the pretext of extending the statutory benefit to those who are not covered by the scheme”. 2) In Lanco Anpara Power limited vs State Of Uttar Pradesh & others the Hon`ble Apex Court has held that “ Construction workers not covered by the Factories Act, 1948 and are entitled to the welfare measure specifically provided under BOCW ACT,

of physical disablement due to employment injury. Old Age Medical Care : For Insured Person retiring on attaining the age of superannuation or under VRS/ERS and person having to leave service due to permanent disability insured person & spouse on payment of Rs. 120/- per annum. Rajiv Gandhi Shramik Kalyan Yojana : This scheme of Unemployment allowance was introduced w.e.f. 01-04-2005. An Insured Person who become unemployed after being insured three or more years, due to closure of factory/establishment, retrenchment or permanent invalidity are entitled to :- •Unemployment Allowance equal to 50% of wage for a maximum period of upto one year. •Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives unemployment allowance. •Vocational Training provided for upgrading skills - Expenditure on fee/travelling allowance borne by ESIC. Incentive to employers in the Private Sector for providing regular employment to the persons with disability : •Minimum wage limit for Physically Disabled Persons for availing ESIC Benefits is 25,000/-. •Employers' contribution is paid by the Central Government for 3 years.

1996 and Welfare Cess Act, 1996”.

Thanking you,

Yours Faithfully,

Avinash M. Patil


Copy to : Shri Ajay Malik Under Secretary (SS-1) Social Security Division Ministry of Labour & Employment, Shram Shakti Bhawan, Rafi Marg New Delhi-110001 Email – [email protected]

Employees’ State Insurance Corporation – applicability to construction site

workers BAI / like minded Trade Bodies /Members have filled the following writs and obtained stay. Sr. No.

Name of Petitioner

Name of Courts and

Appeal / Writ Name

Date of Order and Remark

1. Builders’ Association of India

Madurai Bench of Madras High Court. W.P. (MD) No. 16996 of 2015.

By Order on 21.9.2015, Interim Stay Order granted, which is continuing.

2. Gujarat Contractors’ Association

Gujarat High Court. Special Civil. Special Civil Application No. 18467 of 2015

By Order dated 20.1.2016, Court stated "Rule" - During pendency of Petition, no coercive steps shall be taken against Petitioner pursuant to the impugned circular.

3. Confederation of Real Estate Developers Association of Indi

Karnataka High Court, Bengalore. Writ Petition No. 1652 of 2016.

By Order on 21.1.2016, Court directed implementation of circular dated 31.7.2015 in abeyance, pending issue of Rule.

4. B.G. Shirke Construction Technologgy Pvt. Ltd.

Employees Insurance Court, Hyderabad. I.A. No. 99 of 2016 E.I.C. No. 140/2016.

Praying for suspension of visit by Social Security Officer and his note. By Order dated 26.4.2016, District & Session Judge allowed the petition and directed E.S.I.C. not to take any coercive steps till disposal of main E.I.C.

5. Tata Projects Ltd. In joint venture with Gangdon Yuten Engineering Co.

Delhi High Court W.P. (C) No. 6338 of 2016.

This Court by it's order on 10.8.2016 stated that, since the interest and benefit of the workmen already stands secured through subsequent statutes and/or statutory schemes (read Building and Other Construction Workers Regulation of Employment and Conditions of Service Act 1996), the impugned letter would result in duplication of benefits resulting in a piquant circumstances, i.e. imposing a double obligation on an Employer, which is not mandated in law. Therefore, till the next

date of hearing the impugned letter dated 31st July 2015 shall remain stayed. Renotify on 22nd November 2016.

6. Confederation of Real Estate Developers Association of India

Rajasthan High Court, Jaipur. Write Petition No. 6303 of 2016.

By Order dated 23.8.2016, Circular dated 31.7.2015 stayed qua the members of Petitioners subject to the verification of the fact that, they have made payments due under the Act of 1996. For the purpose of verification, requisite details be submitted to the competent offices of the respondent.

7. Builders’ Association of India

Delhi High Court W.P. No. 2011 of 2016.

Case is admitted and adjourned to 12th July 2017 for hearing. No stay is granted.

Ref: 399/N/2016-17 dated November 25, 2016

To: Shri Bandaru Dattatreya Hon’ble Minister of State for Labour & Employment (Independent Charge) Government of India Room No.120, Shram Shakti Bhawan, Rafi Marg, NEW DELHI – 110 001. Respected Sir,

Sub: Revision of enhancing the wage limit for coverage of Construction Workers under ESIC Scheme from Rs.15,000/ to

Rs.21,000/-.

Reg: Notification dated 6th October 2016 issued by the Ministry of Labour & Employment, Government of India, New Delhi.

Builders’ Association of India (BAI) is an apex all

India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 16,000 business entities as members through its 158 plus Centres (Branches) throughout the country. Regional Associations Affiliated to BAI form indirect membership of more than 1,00,000. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as policy level problems faced by the construction industry. This involves making efforts to obtain from policy makers and authorities, the level of attention that the construction industry deserves in view of its tremendous contribution and importance to the economy.

Sir, at the outset BAI endorse the concern of the Ministry on the social security coverage of construction workers. While appreciating the stand, we would like to bring to your kind attention the difficulty and concern of

Construction Industry on the increased wage limit coverage under ESIC Scheme.

It is a known fact that, the ESI has not been able to upgrade either the infrastructure & other basic medical facilities required by the workers for availing the benefits under the ESIC Scheme. In the circumstances, enhancement of wage ceiling amount would ensure that workers would not be able to avail the benefits. We strongly feel, ESI facilities at the moment are not adequate and adding more members to it would result into further deterioration of the services without corresponding benefits to new members.

ESI coverage area is also being enhanced by adding new districts. This covering of new areas without corresponding increase in infrastructure facilities like new hospitals or clinics won’t serve the desired purpose. This will only add contribution to ESIC without getting the required benefits to the workers.

Further the rate of contribution for new member is

reduced for coverage. This scenario creates two classes of employees for obtaining the benefits, that is, one who pay the contribution @ 6.50% (4.75%--Employer`s Share + 1.75% -Employee`s share) and the other @ 4% ((3%--Employer`s Share + 1% -Employee`s share) for availing the same benefits. This is unethical as the mandate of ESI is to provide benefits from the contributions being paid by beneficiaries & therefore charging different rate of contribution from Employers & Employees would tantamount to treating two equal unequally.

Sir, you also agree to the fact that, in remote places where the construction projects are undertaken the required medical facilities are non-existing. Companies have to provide Doctor with first aid facilities to staff & workers. In view thereof, enhancing the ceiling for coverage would not serve purpose except additional burden of 4.75% on Employers.

It is known to one and all that, the present status of ESI hospitals & dispensaries is pathetic, hence before embarking on new member’s coverage the ESI Authorities should try to first cater to the existing members to the fullest extent and create a goodwill with both Employees and Employers. After this, they should try to enhance the wage ceiling for new member’s coverage.

Construction Workers are migratory and not having permanent address to avail of medical facilities. In fact, they have to to travel a lot of distance for basic things.

Even for availing the benefits the insured person or his family members have to cover a lot of distance for availing the benefits as the ESI hospitals or dispensaries are situated at a place for which the workers find it difficult to commute in the case of disability. They would have to incur expenses on the same, hence instead of going there the workers try to seek assistance from the government hospitals / dispensaries for which a nominal amount is charged & they find it convenient.

In view of the aforesaid, it is therefore suggested that, the ESI Authorities or the Government should first try to put

together the resources at their disposal by providing all the benefits to the existing beneficiaries before embarking on making new beneficiaries as members without first looking at the resources at their disposal.

It will be our honour to brief you on this matter in person, if you kindly grant us an audience at any date and time convenient to you.

Thanking you, Yours truly,

AVINASH M. PATIL

PRESIDENT BUILDERS’ ASSOCIATION OF INDIA

Gearing up for GST BAI continues to engage Government of India, for sorting out

problem areas in the impending GST vis-à-vis real estate and

contracting construction industry.

Revised Model GST Law published by Union Ministry of

Finance in first week of November 2016, has specific section

concerning construction contracts which reads as under:-

Section 186 :- Treatment of Long term construction / works contracts The goods and/or services supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act.

(CGST Law) The goods and/or services supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act.

(SGST Law)

It can thus be seen that from appointed date all ongoing

projects irrespective of waiver of Service Tax or Excise Duty,

shall be subject to GST. BAI therefore made a representation

to Union Revenue Secretary, who is also defacto Secretary of

GST Council, which is reproduced below :-

Ref: 379/N/2016-17 dated 17th November 2016 To, The Revenue Secretary, Ministry of Finance, Government of India, North Block, New Delhi. Respected Sir,

Reg.: GST Regime – to conform the Construction Business With the passing of 101st Constitution Amendment Act on 16th Sept.2016, tax administration concept in India thus been redefined. The striking aspect of changes is attributable to the prevalent different statutory levies since been subsumed into a single levy titled as Goods Service Tax (GST). Builders Association of India, as an apex body of the members involved in Construction business, apprehend that GST system as conceived does not adequately address issues as are unique and peculiar to the construction business. In past too, with every change in tax systems the construction sector have adversely suffered due to lack of statutory clarity, uncertainty & contingency , ill drafted provisions etc. Therefore, BAI while represents to the GOI/GST Council on select aspects about the GST regime impacting on the construction business, cites the following past adverse experience only to reiterate the concern.

Adverse Taxation Situation To dwell on continuous adverse and volatile taxation situation to which the construction business was subjected, BAI attributes to the influence of the Govt. policies, contingency or uncertainty in administration of tax laws and unworkable prescription of statutory procedure, both under Central or State domain. To suffice the descripted adverse situation, the following among others are self acknowledgement. On 3.2.1983 the 46th Constitution Amendment Act 1982 was passed and the States legislature enacted their follow-up legislation from the year 1985 onwards to impose works contract tax i.e. deemed sales. Similar exercise for purpose of levy on inter-state sales involved in execution of works contract was carried by the Central Govt, by amending the CST Act 1956 in the year 2000. On the other hand, Parliament to levy service tax on works contract service amended the Finance Act 1994 to insert a new section 65(105)(zzzza) effective from 1.7.2007 and also prescribed the mechanism to compute taxable service turnover. This raised legal issues as to legal sanction to levy service tax on the works contract services prior to 1.7.2007. BAI members were dragged into undesired litigation, commercial disputes with clients as well as serious financial hardship. Notably for the above situations the compliance with statutory

requirement was a nightmare for members of Industry for the following representative situation:- A. On 17.11.1992 a Constitution bench of apex court in

Gannon Dunkerly & Co case prescribed the legal guidelines for computation of taxation turnover for works contract which to be adopted by State legislature and reiterated the mandatory requirement to provide for deduction of turnover on inter-state/import and sales outside as covered by section 3,4,& 5 of CST Act 1956 for the above purpose of computation of taxable turnover under State Act.

B. On 26.08.2008 , further to above, once again a division bench of apex court on the prescription for computation of taxable turnover under the statute of State sales tax clarified the correct legal position in L&T case with regard to allowable deduction on sub-contractor turnover;

C. On 20.08.2015, similarly, apex court relating the levy of service tax on works contract services for prior period prior to 1.6.2007, in L&T case, had clarified that the levy is sanctioned prospectively for the period after 1.6.2007and levy for the prior period is without the sanction of law: The above dates of event context to the unique nature of construction business need to be appreciated on the serious adverse position to which the members of the construction industry were been subjected. It had caused situation of uncertainty in conducting the business, undesired commercial disputes with the client/contractee, statutory dispute with dept., adverse financial implication etc. It may be relevant to highlight that in given such situation, neither the client/contractee nor the respective government could come to the aid or extend any support to the members of construction industry instead pushing them to financial orphanage and to find their own possible solution.

BAI’s concern under GST regime: BAI thus is seriously concerned about the implication of GST system on construction business, specific to the following position:-

1. PROJECT UNDER EXECUTION: The project work inherently holds the following unique but significant elements with reference to taxation bearing and cannot be overlooked or compromised for more than one reason:

a) The project construction period is generally

longer, so also the contract value wider and, therefore, all the stakeholders of such project are invariably mandated to bear any situational impact and without an exception to implication of taxation;

b) In recent time the execution of projects is

patterned differently e.g. principal to principal, Public-Private-Participation (PPP) , BOLT/BOOT etc. and the exercise of project costing or finalization of the contract price factors into it such eligible exemption, concession etc. In these cases any additional financial implication cannot be any contractual compensation by the concessionair.

c) These aspects have a specific bearing on the

construction value of Power projects i.e. thermal, nuclear, hydro, solar, wind mill etc., railway, port etc since the benefits of exemption or concession on customs, excise duty or service tax etc as accorded since to have factored accordingly.

d) Many project works presently under

execution are parked at various stages of execution and for its purpose could have entered into a long term MOU with overseas Plant & equipment vendors or similarly specialized service providers. Apart from any commercial bearing on such long term arrangements, therefore, the financial burden in view of unveiling of GST system on such procurement viz import sales or services may lose eligible financial benefit.

e) The above description may also percolate

down to the sub-vendors or sub-contractors, including on the pattern of statutory compliance under each statue as to have been opted. BAI is seriously concerned on the aftermath implication of GST scheme on the contracts under execution or presently pending for commencement or the construction is incomplete. Any consequential additional financial bearing on the members of construction industry deserves protection, including for the factored concessional CST benefit against ‘C’ Forms, import sales qualifying for exemption, etc. The stakeholders are not alone domestic but foreign, including with regard to investments for projects under banner of PPP, BOT, BOOT etc. BAI recommends for having a status quo

with regard to all such project work either

under execution, incomplete or to be

commenced earlier to the effective date of

GST levy both under IGST/CGST and

SGST. 2. WORKS CONTRACT-NATURE:

The GST model law proposes to hold works contract to be “service”, instead duel component of (supply) sale of goods and rendition of service.

The nature of contract to be “works contract” or otherwise depends upon various aspects and there is no uniform guidelines to determine the nature of construction contract to be works contract.

Even a works contract awarded to the main-contractor, may not be the works contract when a portion of the work when awarded to sub-contractors.

The above aspect may have bearing on different pattern of contracting method presently in vogue e.g. consortium, Special Purpose vehicles (SPV), Joint ventures, etc.

On the above and apprehending of the GST legislation under IGST/CGST or SGST, may not take a different route to ascertain the nature client order, it is imperative to provide for a binding statutory guidelines be provided to attain uniformity across the country.

3. PROCEDURAL COMPLIANCE:

The construction business operates on geographically spread-out basis and any prescription for the procedural compliance need to be on accommodative basis. Under Finance Act 1994 a contractor can have one composite registration on centralized basis and carry the statutory compliance accordingly.

BAI, therefore, registration under GST regime may consider to a status quo to avoid any operational complication. BAI also highlights the fact of many contracts awarded by the clients, including Govt and PSU etc which provides the contract value inclusive of all taxes & duties. The following position on contractual status as could prevail between the client/contractee & contractor OR contractor & sub-contractors OR the contract cost of execution work as to have factored with eligible exemption/concession etc. Any converse position to above under the GST regime could have serious financial implication on the members of industry unless the same is addressed before GST is put to administration. BAI on a review of GST scheme as available in public domain, underlines the fact of deficiency attention given to taxation aspect as adoptable to construction industry and therefore look forward for your favourable consideration to above suggestions and also request for sanction for a suitable personal audience with make our submissions to deserving position. Thanking you,

Yours truly,

Avinash M. Patil


Registering under GST The migration of existing taxpayers into the new GST system has started. Given below is the full schedule of migration for various States as well as Service Tax registrants.

STATES START DATE END DATE Pondicherry, Sikkim 08/11/2016 23/11/2016

Gujrat, Maharashtra, Goa, Daman and Diu, Dadra Nagar Haveli, Chhattisgarh

14/11/2016 29/11/2016

Odisha, Jharkhand, Bihar, West Bengal, Madhya Pradesh, Assam, Tripura, Meghalaya, Nagaland, Arunachal Pradesh, Manipur, Mizoram

30/11/2016 15/12/2016

Uttar Pradesh, Jammu and Kashmir, Delhi, Chandigarh, Haryana, Punjab, Uttarakhand, Himachal Pradesh, Rajasthan

16/12/2016 31/12/2016

Kerala, Tamil Nadu, Karnataka, Telangana, Andhra Pradesh

01/01/2017 15/01/2017

Service Tax Registrants

01/01/2017 31/01/2017

Delta All Registrants (All Groups)

01/02/2017 20/03/2017

The migration will help current taxpayers under the existing indirect taxes to enroll themselves under the new GST regime in a smooth manner and help them to prepare for the 1st April, 2017 date when the new GST regime is expected to come into force. The enrollment is common for both Central and State GST. The system envisages common registration, common returns, common challans for both State as well as Central GST. Before enrollment on the Common GST Portal, it is necessary to secure a Provisional ID and password from the Central/State authority. Alongwith the Provisional ID and password and certain other prescribed details and documents, the taxpayer can enroll at the Common GST Portal. Procedure for enrollment under GST System Portal #Point 1 – Paperless procedure: The whole system of enrollment will be paperless; hence, no hard copies shall be entertained by the department. Further, all the aforesaid registered taxpayers will need to visit the GST system portal.

Further, it is mandatory for every person to register if the annual turnover is more than Rs 20 lakh, the exemption limit. #Point 2 – Provisional ID and password: Before visiting the GST system portal, you must have the provisional ID and password given to you by your concerned state authorities. #Point 3 – Documents and information required: To complete the registration procedure, you must have the following information: � Provisional ID as explained in point 2. � Password as explained in point 2. � Valid email address (it should not be off professional –

Use your own email ID) � Valid mobile number � Bank account number � IFSC code Further, also carry the following documents which needs to be uploaded on the website: � Proof of constitution of business: � In case of partnership deed – partnership deed (PDF or

JPEG in maximum file size of 1 MB). � In case of others: registration certification of the business

entity (PDF and JPEG format in maximum file size of 1 MB).

� Photograph of promoters/partners/Karta of HUF (JPEG format in maximum file size of 100 KB).

� Proof of appointment of authorised signatory (PDF and JPEG format in maximum size of 1 MB).

� Photograph of authorised signatory (JPEG format in maximum file size of 100 KB).

� Opening page of passbook/statement containing the following information:

� Bank account number � Address of branch � Address of account holder � Few transaction details (PDF and JPEG format in maximum file size of 1 MB). #Point 4 – Fill information and submit: After you submit the form with all the information and documents, an acknowledgement number will be generated. Save that number for future correspondences.

Here are some points which may help you during enrollment

process: Q) What to do in case I have not received the ID and password? A) In case you have not received the provisional ID and password, kindly contact your concerned authorities. Q) Who can be primary authorised signatory? A) A primary authorised signatory is the person who is primarily responsible to perform action on the GST System Portal on behalf of the taxpayer. All communication from the GST System Portal relating to taxpayer will be sent to him.

For example, in case of proprietor, the proprietor himself or any person authorised by him; in case of partnership, any of the partner authorised or any person authorised; in case of Company/LLP, Society, Trust, the person who is authorised by Board or Governing Body, etc., can act as primary authorised signatory. A copy of authorisation needs to be uploaded. Q) Which details are prefilled in the enrolment application for enrolling with GST? A) Following details are auto-populated in the enrolment application based on your existing data: � PAN of the business � Legal name of the business � State � Reason of liability to obtain registration � Email and mobile number Q) Can I make changes in in my legal name, state name and PAN in the enrolment application? A) You cannot make changes to legal name, state name and PAN as appearing in the enrolment application. These details have been migrated from existing tax systems of State or Center, as the case may be. Sr. No.

Provision under the

Model GST Rule

Points for representatio

n

Remarks

1 Section 15 – Value of taxable supply r.w. Valuation Rules Valuation mechanism for deduction of land value not provided for

Clarity required on tax on deduction of value of land transferred under works contract and provisions may be made for mechanism of its valuation

Hon’ble SC held that in absence of deduction of land and mechanism of its valuation the levy under sub-clause. (zzq), (zzzh), (zzd), (zzh) & (zzzza) of S.65(105) levy fails. Refer Larsen & Toubro vs. CCE Kerala [2015] 60 taxmann.com 354 (SC) and Delhi High Court in Suresh K Bansals case in W.P.(C)

Nos. 2235 & 2971 Of 2011 June 3, 2016 reported in [2016] 70 Taxmann.Com 55 (Delhi)

2 Section 13 – Time of supply of service No clarity on taxability of Joint Development Agreements including i)land owner and developer jointly develop building wherein the developer gives some developed

area to the land owner in lieu of land contributed by him ii) land owner and developer jointly develop building and share revenue

In which of these cases the transaction is liable in GST and if yes, provision may be made for value and timing of payment

from sale of building

3 Section 15 – Value of taxable supply r.w. Valuation Rules Under State VAT laws benefit of

deduction on account of stage of completion on construction is available

Suitable amendment should be made in valuation of works contract to deduct the value of works contract till the

buyer enters into agreement.

Refer SC judgement in Larsen & Toubro – vs. State of Karnataka in 2014 (303) E.L.T. 3 (S.C.)

4. Section -16(9) In admissible ITC, expect in case of ‘plant and machinery’ ITC not allowed on construction of units incl. commercial / industrial galas even when used for dutiable production, office for providing services, renting of premises (all taxable manufacture, services), ITC is not allowed if the premises is given on renting not allowable to traders

ITC should be allowed on all supplies which go into construction of immovable property including for commercial, industrial or renting purpose. The term, ‘immovable property’ should be defined in the Act. The term, ‘plant and machinery’ should be defined in the Act.

Will result in increased cost of construction of the immovable properties

5. ITC used for infrastructure projects

Important infrastructure project like port, airport, railway, roads, SEZ etc., should be zero rated

6. Tax on TDR not covered VAT and service tax law (TDR being ‘right in immovable property’)

It should be specifically provided that service would not include immovable property or rights attuned it. TDR or any other right in immovable property may be exempted from definition of service In the alternate if GST is payable on TDR, ITC of GST may be allowed to the developer

Under Model GST law ‘service’ is defined to be “anything other than goods”. Issue may arise whether right in immovable and immovable property itself may be covered under the definition of ‘service’

7. Section-17 – Distribution of ITC Distribution

Credit should be transferred by the head office where it

of ITC by mechanism of ISD

is earned to the locations to ensure optimum utilization

8. Section 159 – Treatment of Long term contracts Transition provisions

-taxability of ongoing works contracts

Provisions should also include when the supply is made and invoice is

issued (within a specified period) or payment is received prior to appointed day. Present provisions of service tax in relation to ‘continuous supply of service’ may be incorporated

Taxability on going works contract is dependent on receipt of consideration and payment of tax or duty on the appointed day

9. Section 145-Credit available on inputs in stock Transition provisions - utilization of credit of goods held by the service provider

As the supply post the appointed day is liable to GST, appropriate provision should be made to allow ITC of goods lying in stock of the service provider on the appointed day

Under the Model GST law, credit is denied unless it is allowable both in the old and new law

10. Section 159 – Treatment of Long term contracts Transition provisions -

taxation of ongoing long term works contract

Window of two years should be provided for review of existing

contracts - till than status quo as per the present law to be maintained

11. Section 13(3) – Continious supply Time of continuous

supply of service - In case of continuous supply of service time of service shall be the due date if ascertainable from a contract. However, if not ascertainable, it is earliest of date of receipt of payment or date of issue of invoice or completion of event

Time of supply in case of continuous supply of service should

be aligned with the Point of taxation Rules, 2011 where in case of continuous supply of service the provision of all or part of service is determined periodically on completion of an event in terms of contract, which require the receiver of service to make any payment as service provider

12. Section -16(2A) - ITC Input Tax Credit (ITC) - ITC shall not be allowed on

Input tax credit should be allowed irrespective of date of registration

stock held prior to registration if the registration is not obtained within 30 days from the date it becomes liable for registration

13. Section -16(11) – conditions to claim ITC When the goods against the invoice are received in lots or installments, the taxable person shall be entitled to take credit on last lots or installments

Credit should be allowed as and when the goods are received in lots

14. Section -16(11) – ITC shall be allowed only if the supplier has made payment of GST should be done away with like in case of Excise and service tax at present

The condition of payment of GST by supplier should be done away with as the claimant would have no control over payment of GST by supplier and he may not be in a position to enforce the compliance of the law by its supplier

In central excise and service tax, availment of credit is not dependent upon payment of tax by the supplier This provision may result into denied of legitimate credit to the receiver or block of huge funds if the supplier default in payment of GST

15. Taxability of retention money – GST is payable when the supply is made, hence, GST has no connection with contractual terms

Provision should be made to pay GST when retention money is due to the supplier. In case GST is levied, ITC should be granted immediately

VAT is payable when the invoice is issued. Service tax is payable based on contractual terms

16. Liability of tax on proforma invoice / RA bills – based on finality of invoice by the recipient (issue of Revenue Recognition / AS – 7)

GST payable on supply made, hence liability may arise even on issue of proforma invoice

Provision should be made in line with service tax, Point of Taxation Rules. Further there will be mis-match of invoices between the supplier and receiver resulting into denial of ITC. Mechanism should be provided to avoid unintended mis-match. In case GST is levied, ITC should be granted immediately.

proforma invoice / RA bills are issued based on finality of invoice by the recipient (issue of Revenue Recognition / AS – 7)

GST - STATUS UPDATE 20th March, 2017

� The Goods and Services Tax (GST) Council, in its meeting held on 4th March, 2017 in Vigyan Bhawan in New Delhi under the Chairmanship of the Union Minister for Finance & Corporate Affairs, Shri Arun Jaitley has approved the draft CGST Bill and the draft IGST Bill as vetted by the Union Law Ministry. Key Features of the Central GST Bill and the Integrated GST Bill are given in the Annexure.

� The Goods and Services Tax (“GST”) Council, in its 12th

meeting held on March 16, 2017, has approved the Draft Bills for implementing GST in States and Union Territories (“UTs”). The UTGST Draft Law is for the Union Territories like Andaman and Nicobar Islands, Lakshadweep, Daman and Diu and Dadra and Nagar Haveli, which do not have legislative assemblies and thus not covered under the constitutional meaning of ‘State’.

� Previously, the GST Council had also approved a Draft

Bill to compensate States for any revenue loss arising out of GST for a period of five years.

� Cess on luxury goods and demerit goods

The GST Council also cleared a proposal to cap the cess on luxury cars and aerated drinks at 15% over the peak rate of 28%. However, the ceiling for the cess on “sin” goods would be much higher. It was said that for paan masala, the cap would be 135%. On tobacco and cigarettes, the cap would be 290% or Rs. 4,170 per 1,000 cigarette sticks. A call is yet to be taken on whether or not a cess would be imposed on bidis. The cess on coal and lignite (environment cess) would have an upper limit at Rs.400 per tonne.

The actual cess on demerit goods, which will help create a corpus for compensating states for any loss of revenue from GST implementation in the first five years, may be lower than the cap as the Council has kept a "little" headroom for future exigencies, Finance Minister Shri Arun Jaitley said.

Giving an example, he said if a luxury car at present commands a total tax of 40%, under the new indirect tax regime, a GST of 28% plus 12% cess would be levied to keep the tax incidence at the same level.

The GST Council has opted to levy cess on five category of products - pan masala, chewing tobacco and cigarettes, luxury cars, aerated drinks and mineral water, and coal and lignite - to create a fund with a corpus of around Rs 50,000 crore for meeting a potential liability.

The GST Council has, however, kept the option of adding more items to the list later.

� GST Rules

The new indirect tax regime also has nine set of rules and regulations, out of which the GST Council has already approved rules for Registration, Payment, Invoices, Returns and Refund. Now, the GST Council will work out Rules on Composition, Valuation, Input Tax Credit (ITC) and Transitions. In the next meeting on March 31, 2017, the Council will take up the Rules on four categories and any changes to the already cleared Rules on five issues.

� Fitment of commodities in GST rate slabs After March 31, the GST Council will take up the exercise of fitment of various commodities in the GST tax slabs – 5%, 12%, 18% and 28% besides the nil rate. The officials have already started the fitment process, which will be put up for discussion and approval before the GST Council.

� Cabinet Approval

The Union Cabinet in its meeting on 20th March, 2017 has approved the following four GST related bills: 1. The Central Goods and Services Tax Bill 2017 (The CGST Bill) 2. The Integrated Goods and Services Tax Bill 2017 (The IGST Bill) 3. The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill) 4. The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill) The CGST Bill makes provisions for levy and collection of tax on intra-state supply of goods or services for both by the Central Government. On the other hand, IGST Bill makes provisions for levy and collection of tax on inter-state supply of goods or services or both by the Central Government. The UTGST Bill makes provisions for levy on collection of tax on intra-UT supply of goods and services in the Union Territories without legislature. Union Territory GST is akin to States Goods and Services Tax (SGST) which shall be levied and collected by the States/Union Territories on intra-state supply of goods or services or both. The Compensation Bill provides for compensation to the states for loss of revenue arising on account of implementation of the goods and services tax for a period of five years as per section 18 of the Constitution (One Hundred and First Amendment) Act, 2016.

Upto date Brief Report of the Cement Cartlization Case

Filed in Competition Commission of India Case No 29/2010 dated 20.06.2012 &

RTPE/2006 dated 30.07.2012 Under Section 53B of the Competition Act,

2002

Builders Association of India (BAI) filed a

complaint with the Monopoly & Restrictive Trade Practice Commission (MRTPC Commission) in February 2006 with regard to involvement of cement manufacturers in unfair trade practices / cartelization and requested the Commission to investigate the matter. Later on Commission sought some more information in support of complaint which were made available to them in November 2006. MRTPC registered the complaint vide case RTPE-52/2006. Consequent upon coming into existence Competition Commission of India (CCI) in the year 2009, the case was transferred to CCI.

In July 2010, BAI filed another complaint with the

CCI alleging unfair trade practices being adopted by the Cement manufacturing companies in jacking up artificially the price of cement. CCI registered the complaint as Case No.29/2010 and investigated the matter. The Director General (Investigation) investigated the matter and submitted his report to CCI. CCI forwarded the investigation report to the respective companies and directed them to file their replies / objections with the findings of the DG(I). The case was heard by CCI on 21st, 22nd & 23rd February 2012. CCI passed the order dated 20th June 2012, declaring 10 cement companies along with Cement Manufacturers Association indulging into unfair trade practices and ordered to deposit Rs.6307.32 Crore, as penalty within 90 days from the date of the order and directed companies to “Cease and Desist” from indulging in such activities in future

CCI by its order dated 30th July 2012, in the case of

RPTE-52/2006, found 12 cement companies to be indulging into unfair trade practice. Since penalties were already imposed on 11 companies including CMA other than Shree Cement Ltd. in Complaint No.29/2010, a penalty of Rs.397.51 Crore was levied on Shree Cement Ltd. with “Cease & Desist” order for not indulging in such practice, in future.

All the cement companies, aggrieved with the

orders of CCI, approached to Competition Appellate Tribunal to seek a stay on deposit of the penalty amount and for setting aside the orders of “Cease & Desist” in June / July 2012.

On 17th May 2013, the Competition Appellate

Tribunal passed the interim order of depositing 10% of the penalty amount imposed by the Commission (relevant portion of the order is given below)

“In that view, we find that there is a prima-facie case

for granting of stay at least in respect of the penalties, which

are of very substantial nature. The total penalties would come

in the range of Rs.6000 crores. While inflicting the penalties,

the CCI has also taken into consideration, not only the 10%

turnover, gross-turnover and other factors, it has also taken

into consideration the net profits earned by these appellants,

which are to say the least fabulous. The Commission has

chosen to impose the penalty at 0.5 times of the net profit for

2009-10 that too from 20th of May, 2009. It is pointed out by

the Commission that the amount of 3 times of net profit

calculated, is higher than 10% of the average turnover. In that

view, the Commission has inflicted the penalties of 0.5 times of

the net profit for one year that is from 2009 to 2010 that too

taking from 20th May, 2009 and 2010-11. Under such

circumstances, we would chose to grant stay to the penalties,

however with a condition that the appellants deposit 10% of

the penalties inflicted. We make it clear that the deposit of the

penalty should be within one month from today. We also make

it clear that if the penalties are not so deposited, the appeal

shall be treated as dismissed without further reference to the

Court.

Thereafter, all the cement companies approached the

Supreme Court of India for seeking stay on the orders of the Tribunal dated 17th May 2013 to deposit 10% of penalty amount imposed by the Commission, The matter was heard in detail on 12th June 2013 but the Hon’ble Court refused to intervene in to the interim orders but extended the last date of deposit of the penalty amount from 16th June 2013 to 24th June 2013 with the directions that the amount of penalty may be kept in the form of Fixed Deposits in the separate accounts of the each company

The matter was argued in detail on the technicalities,

in the Tribunal in October / November 2015 and the Tribunal in its order dated 11th December 2015, allowed the appeals and remanded the orders of the Commission for passing fresh orders. The relevant portion of the orders are reproduced below :-

98. In the result, the appeals are allowed. The impugned order

is set aside and the matter is remitted to the Commission for

fresh adjudication of the issues relating to alleged violation of

Sections 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act

by the appellants. The appellant shall be entitled to withdraw

the amount deposited by them in compliance of the interim

order passed by the Tribunal.

99. The Commission shall hear the advocates/representatives

of the appellants and BAI and pass fresh order in accordance

with law. We hope and trust that the Commission shall pass

fresh order as early as possible but within a period of three

months from the date, which may be notified after receipt of

this order.

100. The parties shall be free to advance all legally

permissible arguments. They may rely upon the documents,

which formed part of the record of the Jt. DG or which may

have been filed by them before the commencement of hearing

on 21.02.2012. The parties shall also be free to press the

applications already filed before the Commission. However,

no application, which may be filed hereinafter for cross-

examination of the persons, whose statements were recorded

by the Jt. DG or for any other purpose shall be entertained by

the Commission.

The CCI, in its meeting held on 17th December 2015, discussed the orders passed by the Tribunal on 11.12.2015 and in accordance with the directions contained at Para No.99, listed the matter for final hearings from 19th Jan to 21st Jan 2016\, as conveyed vide CCI Letter No.1(29)/2010Sectt & 1/RTPENo.52)/2006/Sectt dated 11.01.2016. Since the arguments could not be completed in three days as scheduled, CCI allowed the arguments to continue on 22nd January 2016 which was kept reserved day for continuing the arguments in case the arguments are not completed in 3 days.

The Competition Commission of India have passed fresh orders on 31.08.2016 and have found cement companies of guilty of acting in concert and involved in the cartel. The Commission have kept the amount of penalty, same for all the companies, as imposed on them in its earlier order in the year 2012 and directed them to deposit the penalty amount within 60 days from the date of order.

The Cement companies have started filing appeal in Competition Appellate Tribunal against the order of CCI dated 31.08.2016. The Tribunal have directed all the cement companies to deposit 10% of amount of penalty imposed by the CCI before their appeals are taken up for consideration. Accordingly, the cement companies have deposited the 10% of the amount of penalty amount as reflected in the orders of the CCI with the Tribunal. All the appeals, filed so far, are listed for hearing in the Tribunal on 7th December 2016. On the 7th December 2016 the matter was adjounred to 8th March 2017.

Arguments have started in the Tribunal from 8th

March 2017. As agreed by all the cement companies except M/s. Shree Cement Ltd., the issue of Ambuja Cements Limited in Appeal No.61/2016 will be treated as lead case and other componies will be arguing the matter before the Tribunal, if required, only on specifrc point which have not been convered in the arguments made by the couonsel of M/s. Ambuja Cement Ltd. M/s. Shree Cement Ltd. will argue the matter separately.

The matter was again listed for hearing on 11th, 12th

& 13th April 2017. When the proceedings in the Tribunal begin, Shri T. Srinivasa Murthy, learned counsel for M/s. Ramco Cements Limited (Appeal Nos. 54 and 64 of 2016) informed the Tribunal that in Civil Appeal Nos. 4300-4301 of 2017, the Hon’ble Supreme Court has stayed further proceedings till the next date of hearing i.e. 2nd May, 2017.

BAI President has written a representation to all

members of Parliament requesting to constitute a

“Cement Regulatory Authority” which is reproduced

below.

Ref :210/J/2016-17 dated 13th July 2016 To, The Hon’ble Members of Parliament, Dear Sir/s,

Sub: Appointment of Cement Regulatory Authority.

Builders’ Association of India (BAI) is an apex all India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 16,000 business entities as members through its 155 plus Centres (Branches) throughout the country. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as policy level problems faced by the construction industry.

Country embraced to ‘Market Economy’ from the

‘Command Economy’ in 1991. Industrial licensing and price controls were dispensed with. As a result, economy moved up from “Hindu Rate of Growth” to a healthy 7% to 8% GDP growth. In Market Economy more competition is imperative and to keep a watch on the market players for not indulging in unhealthy business ethics, the Government appointed Regulatory Authorities from time to time for certain sector such as :

(a) Security Exchange Board of India (SEBI) in

1992 for stock markets. (b) Telcom Regulatory Authority of India (TRAI) in

1997 for Telecom Sector. (c) Insurance Regulatory & Development Authority

of India (IRDAI) for Insurance Sector in 1999. (d) Real Estate Regulatory Authority (RERA) in

2016 for Real Estate Sector.

Infrastructure and Housing Sectors being an enabler of economic growth and enhancer of quality of life have high priority in Governments action plan. Cement is part of core industry and is a basic input for construction sector. Cement Industry players continue to indulge in anti-competitive practice since long as can be seen from following:-

(a) In Enquiry No.RTPE 99/1990 on 28th November

2006, Monopolies and Restrictive Trade Practices Commission directed cement companies ‘cease and desist order’. The Hon’ble M.R.T.P. Commission again in Enquiry No.RTPE 21/2001 decreed on 29th February 2008 observed that, “Cement companies are guilty of forming cartel and issued to cease and desist order. The M.R.T.P. Commission also directed them to file the Affidavit with effect that, they won’t do cartelisation again”.

(b) On 20th June 2012, The Hon’ble Competition

Commission of India in case No.29/2010 filed by BAI conclusively found the existence of cartel arrangement amongst the Cement Manufacturers resulting the manipulation of sale price of cement,

and imposed a penalty of Rs.6,307.32 Crore on 10 Cement Manufacturers plus Cement Manufacturers Association (CMA) and also issued ‘cease and desist order’.

(c) Parliamentary Standing Committee of Ministry of Commerce presented its 95th Report on “Performance of Cement Industry” on 24th February 2011 to Rajya Sabha, recommended Vide No. 25 “The Committee is dismayed to note that that one of the reasons for price rise of cement is profit motive of the cement companies. The calculation of fair price and the average retail price, gives a fair idea about the extent of profit per bag will only add to the burden of the consumer i.e. the common man. This will also affect the infrastructure industry. The Committee, therefore, strongly recommends that the Government should establish a statutory regulatory authority to regulate the price of cement to curb the tendencies of market dominance, under-utilization of capacity and artificial scarcity. (Para 3.24)

(d) Cement Industry’s installed capacity is 382.19 million tonnes in 2015-16. As a result of merger and acquisition in last three years, 235.80 million tones i.e. 60% of installed capacity is in hands of six major players (enclosed list). This increases danger of continuing cartelisation.

BAI therefore request you to impress upon government to enact a Regulatory Authority for cement sector and oblige.


AVINASH M. PATIL


List of six biggest Cement producers with their installed capacity

as on 4th July, 2016. Sr. No.

Name of Company

Installed Capacity in

Million tonnes

Remarks

1. Ultratech 91.20 Fine Rs. 1175.49 crores by Competition Commission.

2. Holceim 68.00 Controls A.C.C. and Ambuja Cement fined Rs. 2311.50 crores by C.C.I.

3. Shree Cement Ltd 25.60 -

4. Dalmia Bharat Cement Ltd.

25.00 -

5. India Cement Ltd. 15.50 Fine Rs. 187.48 crores by C.C.I.

6. Jaiprakash & Associates Ltd.

10.50 Fine Rs. 1323.60 crores by C.C.I.

Total 235.80 Total Installed

Capacity 382.19

In Cement related matter, the Director General Supplies & Disposal, Haryana suo moto took and decided: Cement bid-rigging / Cartel Case No. 05/2013

1) Director General Supplies & Disposal, Haryana, invited tender being tender No. 4/HR/RC-E-2/2012-2013 for supply of 4 lakh M.T. of Cement in State to various department / agencies of Government in August 2012.

2) Nine cement manufacturers responded to the tender however two withdraw their offer, leaving seven in the fray. After opening of the tender, D.G. observed that cement companies indulged in bid-rigging and quoted higher rate by forming cartel D.G., therefore complained to Competition Commission of India. C.C.I. after considering the entire material available on record vide it’s order on 2.1.2014, passed U/S 26(1) of the Act directed Director General Investigation of Commission to investigate the matter and report back to C.C.I.

3) During the course of investigation, D.G. called representatives of all seven companies, seeking various details from them. D.G. of C.C.I. investigated the matter and submitted his report on 8.12.2015. C.C.I. in its ordinary meeting held on 23.12.2015, considered the report and forwarded to it to Cement Companies for their response / replies / objection.

4) After 23.12.2015, Cement Companies filed their responses against observation / report of D.G., C.C.I. after hearing arguments passed order U/s. 27 of competition Act. On 19.1.2017

285. The Opposite Parties (OP) are directed to cease and

desist from indulging in the acts/ conduct which have been found to be in contravention of the provisions of the Act.

286. The Commission, for the reasons recorded below,

finds the present case fit for imposition of penalty. Under the provisions contained in Section 27(b) of the Act, the Commission may impose such penalty upon the contravening parties, as it may deem fit which shall be not more than ten per cent of the average of the turnover for the last three preceding financial years, upon each of such person or enterprises which are parties to such agreement or abuse. Further, in cases of cartelisation, the Commission may impose upon each such cartel participant, a penalty of upto three times of its profit for each year of continuance of the anti-competitive agreement or ten per cent of its turnover for each year of continuance of such agreement, whichever is higher.

287. It is evident that the legislature has conferred wide

discretion upon the Commission in the matter of

imposition of penalty. It may be noted that the twin objectives behind imposition of penalties are: (a) to reflect the seriousness of the infringement; and (b) to ensure that the threat of penalties will deter the infringing undertakings. Therefore, the quantum of penalties imposed must correspond with the gravity of the offence and the same must be determined after having due regard to the mitigating and aggravating circumstances of the case.

288. The Commission has given its thoughtful

consideration to the issue of quantum of penalty. The impugned tender was for entering into annual rate contract with respect to cement by DS&D for supply to various Departments and Statutory Bodies of the Government of Haryana. It is not in dispute that due to the anti-competitive conduct of OPs, the impugned tender had to be cancelled forcing the State to start the process to procure cement- a critical input for infrastructure, afresh, resulting in possible delay in timely supply for the execution of public infrastructure projects which may result in time and cost overrun.

289. At the same time, the Commission is cognizant of the

peculiarities of tendering process which have been pointed out by some of the OPs (ACL, ACC). It has been submitted by the parties that the NIT issued by the DS&D advertised the tentative quantity based on estimated figures of cement requirement by various departments/ boards (i.e. direct consumers) during the course of the tender year. The DS&D does not disclose (i) the total quantity that will be finally purchased, (ii) the quantity of cement that will be required at each of the specific destinations, (iii) the type of cement to be supplied at each of these destinations, and (iv) the quantity requirement at a particular destination. Therefore, at the time of submitting bids, a bidder is not aware of the quantity that any Department or Board would procure for a destination. Further, in practice, the consignee is not under an obligation to purchase the specific quantity amount even thereafter. It has been argued that it is entirely possible that when final orders are placed, demand at one destination may be nil and at the other destination, it may actually double vis-a-vis the original quantity. Further, the consignee is not obligated to purchase the entire quantity from the specific L1 bidder identified by the HPPC.

290. Having said that, it is not in dispute that in the instant

case, the impugned tender was cancelled and fresh bids invited by re-tendering. Though competition law frowns upon even the agreements which are ‘likely’ to cause appreciable adverse effect on competition, while quantifying penalties, a distinction has to be made between the agreements which actually cause appreciable adverse effect on competition and the agreements which are likely to cause such effects. The Commission is also not oblivious of the total quantity of the procurement requirement while

deciding the quantum of penalty. The Commission has also taken note of submissions made by the learned senior counsel appearing on behalf of ACC/ ACL that they are subject to an intensive and robust competition law programme through Lafarge Holcim’s Fair Competition Review Programme, the purpose whereof is to create awareness and impart training to key employees. The employees have to undertake regular competition law training and assessment of their business dealings and practices. The learned counsel appearing on behalf of JAL also pointed out that it has put in place a competition compliance programme through which employees are being imparted knowledge on competition law.

291. On a careful consideration of the pleas advanced by

the OPs and the peculiar conditions of the tender, the Commission finds it appropriate to impose a penalty on OP-1 to OP-7 at the rate of 0.3 % of their average turnover of the last three financial years based on the financial statements filed by them. Details of the quantum of penalties imposed on the OPs are set out below:

292. Accordingly, a penalty of Rs. 18.44 crore, Rs. 68.30

crore, Rs. 38.02 crore, Rs. 9.26 crore, Rs. 29.84 crore, Rs. 35.32 crore and Rs. 6.55 crore is imposed upon OP-1 to OP-7 respectively. (Aggregate penalty is Rs. 205.73 crores).

293. The Commission directs the above OPs to deposit the

penalty amount within 60 days of receipt of this order.

Standardising of Bidding Documents Construction Industry Development Council (CIDC) has initiated a 'High Powered Working Group to harmonise and standardise National Bidding Documents'. BAI President is a Member of this Working Group. The first meeting of the High Powered Working Group (HPWG) was held on 24th January 2017 at the Conference Room of CIDC in Delhi.

Sr. No.

Name of Ops

Turnover for

2012-13

Turnover for

2013-14

Turnover for

2014-15

Average turnover

for Three Years

@0.3% of

average turnover

1. Shree Cement Ltd.

5778.58 6072.25 6591.42 6147.41 18.44

2. UltraTech Cement Ltd.

21622.68 21974.92 24699.04 22765.54 68.30

3. Jaiprakash Associates Ltd.

13512.08 13327.02 11185.73 12674.94 38.02

4. J.K. Cement Ltd.

2960.76 2844.12 3458.67 3087.85 9.26

5. Ambuja Cement Ltd.

9583.05 10424 9834.56 9947.20 29.84

6. ACC Ltd. 11392.73 12006.49 11916.18 11771.80 35.32

7. J.K. Lakshmi Cement Ltd.

2110.40 2100.87 2335.26 2182.17 6.55

Those present in the meeting were : Mr. Pradip Bhargava, Former Addl. Chief Secretary, Govt. of MP….Chairman Mr. Divakar Garg, Former Director General, CPWD ………………. Convener & Co-Chairman Mr. Ashok Pradhan, Financial Advisor, Commissioner of Industries, Govt of Rajasthan ……………………………………………………. Member Dr. M. K. Datar, Sr. Advisor, Indian Banks Association……………. Member Mr. Anil Kumar, Director, Ministry of Railways ………………….... Member Mr. Anupam Agarwal, CPWD . …………………………………….. Member Mr. P. C. Sunoj, Dy. General Manager, State Bank of India ………... Member Mr. Asheesh Sengupta, DGM (C&P), Engineers India Ltd………….. Member Mr. Ashok Kr. Vartia, AGM, Exim Bank……………………………. Member Mr. Avinash M. Patil, President, BAI………………………………... Member Mr. Chander Verma, Director, Continental Construction Ltd……….. Member Mr. P. V. Rao, Managing Director, PebsPennar……………….………Member Mr. Akhilesh Kumar Srivastava, CGM (CMC), NHAI ……………… Member Dr. Prakash Mathur, Dy. Director, Pidilite Industries Ltd. ……………Member Col. Bishwajeet Choubey, CCE, DRDO……………………………… Member Mr. Suman Singh, Chief of Marketing, Tata Steel Ltd.………………..Member

The following were also present in the meeting : Mr. R. N. Gupta, Vice President, BAI Mr. Raju John, Executive Secretary, BAI Mr. S. S. Arora, Executive Secretary, BAI Mr. B. K. Singh, DRDO Mr. Pankaj Kumar Ojha, Tata Steel Mr. Sunil Mahajan, ADG, CIDC Dr. P. R. Swarup, DG, CIDC

While welcoming the participants, Mr. Bhargava explained the background of the constitution of the HPWG by CIDC and said that it has been formed to evolve a set of bidding and contract documents, which would include the General Conditions of Contracts, Standard Technical Conditions and Standard Operating Procedures (SOPs), which are in sync with today's infrastructure and construction needs. He added that a preliminary meeting had been already held wherein some key issues have been identified which have been placed before the members. He then requested Dr. P. R. Swarup, DG, CIDC to apprise the participants about the objectives of the HPWG, historical background and the actions proposed to be taken.

Dr. Swarup presented an overview of the formation of the Council in 1996 and previous work done by CIDC towards harmonization of Contract/ Bidding Conditions, which were approved by the Committee of Secretaries of Government of India under the auspices of Union Ministry of Statistic and Programme Implementation (MOSPI) in 2001 and later revised in 2005. He apprised that as directed by Committee of Secretaries, these documents were widely circulated by CIDC to all the Government agencies, and the Public Sector Enterprises, as the model guidelines and has helped many Project Authorities to develop their Contract documents and works manuals. He further said that in present scenario because of many new conditions being introduced from time to time, there is a need to re-develop National Bidding Documents and therefore this HPWG has been formed. Dr. Swarup explained the following identified key issues and alsodetailed the terms of reference of the Working Group.

1) Lowest price syndrome 2) Capability assessment of the service provider. 3) Dispute resolution - Arbitration 4) Engagement of skilled workers 5) Engagement of Professional engineers 6) Engagement of screened & credible vendors 7) Safety, health, & Environment concerns. 8) Project export issues.

9) Safeguards for the lenders / Bankers &F.Is 10) Insurance products (Tailor made) 11) Penalties & Bonuses 12) Cash flows & payments to be released. 13) Pre-engineered & pre-fabricated Construction 14) Material Specifications A base Model Bidding Document* was circulated to all the participants and Chairman advised all of them to send their suggestion/feedback to CIDC Secretariat, considering all the above issues and add other issues which they feel important. It was further requested to send the same by 25th February, 2017, enabling the secretariat to compile the same. Upon compilation, it will be circulated to all members and the next meeting shall be held soon after that. Once a Model document is ready as per the deliberations in next few meeting, it will be sent to MOSPI for consideration.

BAI Submitted its comments on CPWD Matters which is represented below Ref. No. BAI/DC/03/2016/43 Dated, 2nd September 2016 The Director General Central Public Works Department, 1st Floor, ‘A’ Wing, Nirman Bhawan New Delhi-110011. Subject - Request for solution to problems being faced by

Contractors in CPWD in general.

Dear Sir, We convey our sincere thanks and gratitude for

accepting our request for holding a meeting in your office, on Friday, the 9th September 2016, to discuss / consider various issues being faced / confronted by the contractors in day to day execution of works. We humbly request that the Department may consider the following points, and points which have already been sent to your esteemed office vide our letter No.BAI/DC/03/2016/05 (Annexure – I), (Annexure – II) & (Annexure – III) dated 6th April 2016 and 6th June 2016 respectively (copies enclosed for ready reference), in this meeting. We are sure that solution to these problems will be in the interest of the Department / progress of work in particular and the Contractors in general as well as help in avoiding disputes and litigation up to great extent. 1. Time bound Approval of Extra / Substitute Items, Extention of Time & Release of with-held amount - Due to delay in giving sanction / approval by Engineer in Charge for the following items to avoid held up amount of contractors / loss to contractors, delay in execution of work.

1.1 Delay in sanction of Extra, Substituted and deviation items inspire of provision in Clause 12 of agreement.

1.2 Delay in releasing the withheld amount for milestones because the Engineer-In-charge insists

that EOT must be granted before releasing the withheld amount. It is practically very difficult and time consuming. It is proposed to delete the condition for withholding amount for milestones.

1.3 Delay in making payment of RA bills and Final

bill inspite of the specified provisions in the agreement.

1.4 Delay in payment of escalation under Clause 10 of agreement for labour materials, etc. 1.5 Denial / delay in payment of escalation for cement consumed in RMC.

1.6 Denial / delay in payment for VAT for extra, substituted and deviation items

payable at market rates.

1.7 Denial / delay of payment for GRIHA compliance for agreement items, extra,

substituted and deviation items.

(Note – Kindly direct the Senior Officials / Field Staff to follow the instructions / provisions in the Manual / OMs. Issued by your office from time to time) 2. Performance, Security and Retention Money -

Presently Performance Gurantee of 5% is taken on awarding of the contract and Retention Money @ 2.5% is deducted from the R.A. bills, which is too high and un-necessary forced to add the cost of money / bank charges / margin money to project. When contracts are only given to registered and pre-qualified contractors, there is no point in putting a burden of this money on project with no advantage to anybody. Hence Performance Security and Retention Money combined should not be more than 2.5% . This reduction from 7.5% to 2.5% will also help to maintain the cash flow of the contractor.

3. Deposit of EMD - EMD is deposited in any one of

the divisions. Some divisions decline to receive EMD. It is released after receipt of clearance from the Tenders Calling Division which takes long time and delays refund of EMD. It is proposed that the divisions collecting the EMD should transfer the amount to the division calling the tenders which shall refunded to all the tenders except L-1 after opening of the Tender.

4. Mobilization Advance - Bank Guarantee from the

Contractor should be insisted upon for the amount and the period which has been requested for by the Contractor and not for the full amount / completion time of the contract.

5. Freezing of Cost Indices - As per Clause 10 of the agreement, cost indices for payment of escalation are frozen as on the stipulated date of completion of the

work even in the case when reasons of delay are attributed to the department. Thus the contractors are penalized for the faults on the part of department. This is unfair, unreasonable and illegal. The condition for freezing the cost indices need to be removed and escalation to actual cost indices should be paid from the day of start of work and upto the actual date of completion of work.

6. Compensation on Foreclosure of Work - In case of fore-closure of the work by the Department, Clause 13 provides to compensate the contractor for expenditure incurred on preparation for execution of the work but restricts the amount of compensation to only 2% which is found to be too small in many cases putting the contractors to heavy losses for no fault on their part. It needs to provide to pay compensation /loss of profit to contractor and increase limit to minimum 5%.

7. Interest on Delayed Payments - It will be fair and reasonable to provide in the contract for payment of compensation/interest for delay in payment to the contractors for the reasons attributed to the department or clients for not making available the funds or decisions or otherwise. In many cases, the contractors suffer heavy losses on this account. It leads to litigation and the department is made to pay interest for whole period of delay including long period of litigation.

8. Milestone - Milestone are also derived from the time limit which is insufficient and the target is not achieved in the given time and contractor s are penalized which again affect the cash flow and progress of work. Werequest that sufficient time of completion of work be given.

9. Implementation of Safety Measures at Work Sites - It is the responsibility of the contractor working on a project to implement, enforce the safety policies and should be emphasized over the duration of the project. In order to facilitate the same effectively, Safety must be an item in the agreement schedule such as providing barricades, installing sign boards, providing external protection by netting etc.

10. Simplification / Relexation of Conditions - Simplification of stipulated condition in NIT in respect of eligibility of contractors enlisted in Class - 1A, 1AA and 1AAA categories.

11. Nomination Clause in the Agreement - In the eventuality of the death of a contractor, both the department and contractor’s mainly are put to lot of hardship to carry out further works. Besides it becomes an ordeal for the family members to get back the investments. In such cases, a clause in the agreement nominating a person to carry on the project will make the job easy. This is more vital in individuals taking contracts and in partnership firms.

12. A circular has been issued that the Clause – 10CC / 10CA is not applicable on the amount of substituted items. The substituted items are being prepared on or above the quoted rates so the Clause 10CC / 10CA has to be paid on substituted items deemed to be on quoted rates.

13. As per new rules framed in CPWD recently, the contractors who have not executed even a single work in Government organizations, have been allowed for tendering although they are not experienced, conversant with the rules, regulations and procedures of CPWD. It also deprived the enlisted and experienced contractors. It needs to be reviewed and modified. Any other point with the permission of the Chairman of the meeting.

Yours faithfully,

Sd/- R N Gupta

Vice President Builders’ Association of India

Encl : As above.

(Annexure – I)

No.BAI/DC/03/2016/05 Date : 6th April 2016

The Chief Engineer (CSQ) Central Public Works Department First Floor, ‘A Wing’, Nirman Bhawan, Maulana Azad Road, New Delhi-110011.

Subject : Regarding CPWD Contract Condition Sir,

Some of our members / construction companies have approached us to take up the matter with CPWD for the contradictory provisions in specifications of items covered under CPWD specifications are observed. Also there are items in Delhi Schedule of rates which need to be modified. Some of the items where clarifications / corrections needed are submitted for your kind consideration.

Earth Work 1.0 For item of excavation of earth, item No. 2.7.3 says that In firm soils, the sides of the trenches shall be kept vertical upto a depth of 2 metres from the bottom. For greater depths, the excavation profiles shall be widened by allowing steps of 50 cms on either side after every 2 metres from the bottom. Alternatively, the excavation can be done so as to give slope of 1:4 (1 horizontal : 4 vertical). Where the soil is soft, loose or slushy, the width of steps shall be suitably increased or sides sloped or the soil shored up as directed by the Engineer-in-Charge. It shall be the responsibility of the contractor to take complete instructions in writing from the

Engineer-in-Charge regarding the stepping, sloping or shoring to be done for excavation deeper than 2 metres. Under item 2.11.1.2 it specifies that In case of open footings / Rafts at a depth of more than 1.5 metre, alround excavation of 75 cm shall be measured for payment to make allowance for centering and shuttering. Additional excavation beyond this limit shall be at the risk and cost of the contractor and shall not be measured for payment.

2.0 For item of earth work for major works, item No. 2.22.1 says that, excavation shall be undertaken to the width of the Basemen t / Retaining wall footing including necessary margins for construction operation as per drawing or directed otherwise. Where the nature of soil or the depth of the trench and season of the year, do not permit vertical sides, the contractor at his own expense shall put up the necessary shoring, strutting and planking or cut slopes with or without steps, to a safer angle or both with due regard to the safety of personnel and works and to the satisfaction of the Engineer. Measurement of plan area of excavation for payment shall be permitted only. The specifications covered at Sr. No. 1.0 above allows for payment with a slope of 1:4 for excavations more than 2.0 metres plus alround working margin whereas the specifications covered at Sr. No. 2.0 above only refers to drawing without any indication for side slopes essentially to be maintained as in no case vertical cutting is possible. The ambiguity in provisions as detailed above need clarifications. 3.0 In CPWD specifications under Sr. No.0.6, it is stated that, Specific provision shall be made in the estimate for such situations where the foundation level is more than 3 (three) metre depth from the plinth for all types of structures mentioned above. No specific provisions are made by any NIT approving authorities as observed in the tenders floated by various authorities. The payment for the works to be executed below ground should be made in the same way as these are made for superstructure works defined by levels, i.e. extra for works upto two basements, extra for works two to four basements and so on. 4.0 For marble work in steps, jambs, columns and other plain work under clause 8.5 of the specification describes for measurement of stone as “In the case of radially dressed or circular stone used in the work, the dimensions of the circumscribing rectangle of the dressed stone, shall be measured correct to a centimetre and thickness, correct to 0.5 cm” and for wall lining/veneer work under clause 8.6 measurement of stone is to be done as “The length and breadth shall be measured correct to a cm. In case of radially dressed or circular slabs used in the work, the dimensions of the circumscribing rectangles of the dressed stone used in the work, shall be measured & paid for. The area shall be calculated in sqm nearest to two places of decimal”. No such mode of measurement has been given in the specifications under clause 11.19 when marble stone is used for flooring.

Mode of measurement for both i.e. for vertical use as well as for horizontal use of marble should be same. DSR items which need clarifications 1.0 Item No.22.7 in the DSR is executed for water proofing treatment at terrace which says that, providing and laying integral cement based water proofing treatment including preparation of surface as required for treatment of roofs, balconies, terraces etc --------------. This item is executed at terrace without any extra payment for its execution in high rise building. For execution of this item in high rise building, provision for extra rate for extra height more than level 5 to be made as is available in DSR for RCC and brick work etc. 2.0 Similar provisions are needed for item No.22.14 Grading roof for water proofing treatment with .14.1 Cement concrete 1:2:4, Cement mortar 1:3, Cement mortar 1:4 3.0 Item 5.22 and 5.22A of DSR, Steel reinforcement for R.C.C. work ---has two rates , one for reinforcement below plinth level and another for above plinth level but the Analysis of rate of both these items is same which is not correct. Benefit of its execution at height shall be made part of item. 4.0 Item 13.22 of Sub head finishing says that , Rates for external plaster are for height upto 10m from ground level and extra is payable for every additional height of 3m or part thereof.. No such provision has been taken in the rate for execution of items in external finishing . Provision of extra rate for executing all external finishing items for height more than 10 metre should be made part of these items. 5.0 Item of structural glazing has been included in DSR 2014. As per item No. 26.3 of DSR, measurement for payment of glass says that “only the actual area of glass on face # 1 of the glass panels (excluding the areas of the grooves and weather silicone sealant) provided and fixed in position, shall be measured in sqm”. Same is the case with item No. 26.8 which also states that “For the purpose of payment, actual elevation area of Glazing including thickness of joints and the portion of Glass panel inside the SS channel shall be measured”. These provisions seem to be in order for rectangular or square areas. But for non regular size of glazing such as circular, trapezoidal or such other shapes, provision of IS code ----------shall be made part of this item. It is, therefore, requested to look into the matter and do the needful at an early date. Thanking you,

Yours truly,

Sd/- R N Gupta


(Annexure – II)

No. BAI/DC/03/2016/05 Date: 6th June 2016 Chief Engineer – CSQ Central Public Works Department First Floor, ‘A Wing’, Nirman Bhawan, New Delhi-110011.

Subject : Regd applicability of VAT on Items used in

Projects Respected Sir,

This is regarding the percentage of VAT /WCT as considered by the department in the analysis of rate (AR). At present, the department considers the VAT percentage as applicable on individual items on supply / purchase. However, as per the directions issued by the Department of Trade & Taxes, Government of NCT of Delhi (in the year 2013) the department is required to levy VAT @ 12.5% on all the materials used, including profit, in the construction except iron & steel, where the VAT is applicable @ 5% if and only if the iron & steel is used in same form in the project. Maximum items of wood, marble, electrical items VAT applicable is 5% but contractor suppose to pay 12.5% WCT all items.

It will be appreciated that in view of the above irrespective of different VAT rates applicable for different items the liability of the contractor is @ 12.50% including profit on assessment of WCT except for the Iron & Steel.

You are, therefore requested do the needful at your end. Thanking you,

Yours truly,

Sd/- R N Gupta


OFFICE OF THE COMMISSIONER DEPARTMENT OF TRADE & TAXES, VYAPAR

BHAWAN, I.P. ESTATE, NEW DELHI

No. F.Policy/IAT/2013/1449-60 Dated : 28th March 2013 The Executive Engineer Central Public Works Department, 335-A, Nirman Bhawan, New Delhi – 110011

Sub: Effect of Taxes Ref: Letter No. DJB/CE (Dr) P-1/F.2 (4)/2013/838 dated

26.02.2013

Sir, Please refer to your letter vide no. CSQ/CM/18 (2)/2013/341 dated 08.03.2013 on the above noted subject. 2. In this connection; I am directed to inform you that in a works contract transaction, the net VAT liability involved is to be calculated on the value of contract deducting there from the amount involved in labour, services and other like charges. Alternatively, the VAT liability can be estimated on the value of materials adding therein the contractor’s margin/ profit percentage. The rate of tax on such amount is to be calculated @ 12.5% irrespective of tax rates on individual items except for the amount of Iron & Steel to be used in the same form in the project. Such amount of Iron and Steel attracts VAT @ 5%. 3. As far as addition of 2% of VAT is concerned, it is submitted that as per DVAT Act, 2004, no commodity attracts VAT rate of 2%. However, as per Section 36A of DVAT Act 2004, the contractees are required to deduct TDS on account of VAT from the payments made to the contractors. It is clarified that said 2% (now 4% w.e.f. 1601.2013) does not affect the VAT liability in the transactions since this amount is only the tax deducted at source on account of VAT which is ultimately adjusted by the contractor while discharging his VAT liability. In other words, the contractor discharges his VAT liability to the Delhi Government after deducting the TDS amount deducted by the contractee. Hence, it is clear that the 2% TDS which is the subset of the VAT liability to be accrued in the contract, is not required to be added at the end of justified cost when the said cost (as per Delhi Schedule of Rules) is already inclusive of VAT liabilities. 4. It is important to mention that if the contract is inclusive of taxes and 2% TDS is added in the value of the contract, then the contractor is unjustifiably paid VAT at a higher rate of 2% than he is actually required to be paid and ultimately, the contractor is benefited by pocketing this extra 2% amount. You are, therefore, advised to make necessary amendment in the CPWD Works Manual. Also, in public interest, you may like to reduce any extra loading done on this account in already prepared justified Rates / Awarded Works.

(C. Arvind) Addl. Commissioner (Policy)

Copy for information to:- 1. PS to Secretary, PWD, GNCTD, Delhi Secretariat, I.P. Estate, New Delhi -110002 2. PS to CEO, DJB, Varunalaya Phase – II, Jhandewalan, Karol Bagh, New Delhi – 110005 3. PS to Secretary, Irrigation & Flood Control Department, GNCTD, Delhi Secretariat, I.P. Estate, New Delhi - 110002 4. PS to MD, DSIIDC, N-36, Bombay Life Building, Connaught Circus, New Delhi – 110001 5. PS to MD, DTTDC, 18-A, D.D.A.SCO Complex, Defence Colony, New Delhi - 110024

6. PS to Commissioner, SDMC, Civic Centre, Minto Road, Delhi – 110001 7. PS to Commissioner, EDMC, Patparganj Industrial Area, Delhi – 110092 8. PS to Commissioner, NDMC, Civic Centre, Minto Road, Delhi – 110001 9. PS to Vice Chairman, DDA, Vikas Sadan, INA, New Delhi 10. PS to Commissioner, Trade & Taxes, 11. Joint Commissioner, Special Zone Trade & Taxes Deptt.

(Annexure – III) No. BAI/DC/03/2016/23 Date: 6th June 2016 Chief Engineer – CSQ Central Public Works Department First Floor, ‘A Wing’, Nirman Bhawan, New Delhi-110011

Subject : Regarding required amendments in DSR /

Analysis of rates Respected Sir,

With regards to the subject matter and as discussed

with you personally, we wish to bring to your kind notice that the rates/ coefficients of some of the items in the ‘Analysis of Rates’ need to be amended in line with the prevailing market rates. The items requiring a relook are mentioned below:-

1. Item no. 8.6, vol-I :- Mirror Polishing

The Item description shall be ‘Extra for’ Mirror Polishing. This is in line with the rates and coefficients considered in the Analysis of rates.

• Hence, ‘Extra for’ needs to be added in the description of the item.

2. Item no. 8.12, pg.327, vol-I :- Granite Stone flooring Labour rate considered – Rs. 1136.80 for 10sqm Therefore, Rs. 113.68 for 1 sqm and Rs. 10.56 for 1 sqft

• However, the prevailing labour rate for Granite stone flooring is Rs. 50 per sqft. Hence, amendment needed.

3. Item no. 11.23.1, pg583, vol-I:- Marble Stone flooring Labour rate considered – Rs. 1180.00 for 10sqm (522+329+329=1180) Therefore, Rs. 118.00 for 1 sqm and Rs. 10.97 for 1 sqft

• However, the prevailing labour rate for Marble stone flooring is Rs. 50 per sqft. Hence, amendment needed in cost of labour.

4. Item no. 11.26, pg587, vol-I:- Kota Stone flooring

Labour rate considered – Rs. 1136.80 for 10sqm (478.80+329+329=1180) Therefore, Rs. 113.68 for 1 sqm and Rs. 10.56 for 1 sqft

• However, the prevailing labour rate for Kota stone flooring is Rs. 25 per sqft. Hence, amendment needed.

5. Item nos. 11.36, 11.37, 11.38, 11.39, 11.40, 11.41.1 to 11.41.4, pg595, vol-I:- Wall Tile & Floor Tile The percentage of wastage considered in the analysis of rates is 2.5% wastage. However, in actual scenario 10% wastage is seen in tile work.

• Hence the wastage percentage shall be considered as 10% in the Analysis of rates for Tile work.

You are review the above mentioned points and make applicable amendments/ changes in the upcoming DSR/ Analysis of rates. Thanking you,

Yours truly,

Sd/- Ram Avtar

Chairman – Delhi Centre Builders’ Association of India

Service Tax Matters

BAI being a member of Regional Advisory Committee of

Service Tax - Mumbai Zone was called for meeting to be

held on 15-2-2016 (invitation printed herein below), which

was subsequently postponed to 26-2-2016, was requested to

forward points for discussion.

OFFICE OF THE CHIEF COMMISSIONER

SERVICE TAX, MUMBAI ZONE 15TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT,

MUMBAI-400 021. Email: [email protected] Tel No: 022-22049152

F.No.IV/16-35/MSTZ/CCO-TECH/2015 Mumbai, the February, 2016

To, AS PER LIST Gentlemen,

Subject : Regional Advisory Committee for Service Tax constituted under

Trade Notice NO. 1/RAC/CCO/MSTZ/2015 dated 12.05.2015 -

Meeting proposed to be held - reg.

The Chief Commissioner of Service Tax has proposed a meeting of the Regional Advisory Committee - Service Tax (RAC - ST), to be held on 15.02.2016 at 15.00 Hrs at the Conference Hall, 15th Floor, Air India Building, Nariman Point, Mumbai 400021. It is requested to forward fresh points, if any, proposed to be discussed in the RAC meeting, other than those already submitted to this office in response to this office letter of even number dated 13.05.2015, to the undersigned on or before the 10th February, 2016 in writing as well as through email at [email protected], so that points could be included in the agenda and the same could be circulated to all the members to enable them to participate in a purposeful discussion. Any point / issues received after the stipulated time limit may not be entertained.

Yours faithfully,

(NAVNEET) ADDITIONAL COMMISSIONER

BAI accordingly by its letter No. 543/F/2015-16 dated 11th

February 2016 forwarded points mentioned in Para above

(BAI's letter printed hereinbelow).

Ref: 543/F/2015-16 dated 11th February 2016 To, The Additional Commissioner, Service Tax, Mumbai Zone, 15th Floor, Air India Building, Nariman Point, Mumbai - 400 021 Dear Sir,

Sub:- Regional Advisory Committee Meeting for Service Tax to be held on 15.2.2016 at 15:00 hours

in your office. Builders' Association of India (BAI) is an apex all India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 16,000 business entities as members through its 153 plus Centres (Branches) throughout the country. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as supply level problems faced by the construction industry. Technical officer, TRU, issued Report of High Level Committee's recommendation regarding valuation of flats for levy of service tax in letter F. No. 354/311/2015 - TRU dated 20.1.2016 (Copy Enclosed). This Letter confirms the view expressed in earlier circular No. 151/2/2012 - ST/10-2-2012 for valuation of the portion assigned / allotted to the landlord by the developer in consideration of the land / development right as opposed to the view expressed in the Education Guide. Following points arises out of this circular for your sympathetic consideration.

a) There is no confusion / doubt between the earlier circular

and in the Education Guide that the consideration for construction service provided by the builder / developer is in form of the development right granted by the landlord.

b) The valuation of the consideration is required to be

considered and not the valuation of the construction service. Thus, the development right is required to be valued.

c) The premises that value of "development right" is not

ascertainable is incorrect, in as much state governments publishes yearly Stamp Duty Ready Recknor in which cost of land i.e. F.S.I. is stated. In fact this is required for levy of stamp duty on development right.

d) The developer purchase TDR and fungible FSI on his account in order to provide the construction service. In case of re-development society building, the developer also pays some corpus fund to the society, charges for alternate accommodation, shifting allowance to the existing occupants / members. All these expenditure is incurred by the developer and does not form a part of consideration flowing from the landlord / society to the developer which is required to be valued for construction service provided by the developer. Hence, such expense should not be reckoned for the purpose of valuation of development right as a consideration.

e) In view of the forgoing, valuation of flats to be given to

land owner can not be similar to the flats being sold to other flat purchasers, for the simple reason that the value of flats sold contains the value of land which is very substantial in a city like Mumbai. Further, the flats to be given to land owners are much prior to approval of plans by the municipal corporation. Furthermore, the right to obtain the flats accrues to the landlord from the development agreement itself which can never be equated with that of sale of flats to the purchasers as lot of activities are required to be done in between. It being so, the value of flat allotted to land owner is much lower than flat being sold to flat purchasers which takes place after commencement of work. It should not be lost sight that the service tax is on value of service provided and not of value of land.

f) So far as the timing of payment of service tax is

concerned, the landlord / society absolutely transfer the development right only after getting the possession and making conveyance deed, till then it is merely a license to enter and complete the work in terms of the development agreement. It is done so as the landlord do not wish to alienate with right on the property till the project is complete. Allotment letter / development agreements are mere intentions and right does not pass on parties. There are cases where the High Court has removed the developer on a plaint of a land lord / society for deficiency in work and new developer is brought in.

g) The above holds good even for re-development of societies building or tenanted buildings where there is reconstruction of flats / tenements for members / tenants.

In view of above BAI request you to,

1. Adopt the Stamp Duty Ready Reckoner Rate (SDRR) published by Maharashtra Government every January for the purpose of arriving valuation of development agreement of the land owner portion and also the portion of free sale component of the developer, also land value or F.S.I. value. Income Tax Department also adopt SDRR.

2. Service tax be payable on completion of service and not at the time of entering into development right agreement.

The above should apply in both the cases of pure land development and re-development Thanking you,

Yours faithfully,

AVINASH M PATIL


Unfortunately BAI's view point did not find favour with

Service Tax Dept, as can be seen from Minutes of Regional

Advisory Committee meeting held on 26-2-2016

(minutes printed hereinbelow).

OFFICE OF THE CHIEF COMMISSIONER SERVICE TAX, MUMBAI ZONE

15TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI-400 021.

Email: [email protected] Tel No: 022-22049152

Minutes of The Regional Advisory Committee Meeting Held on 26.02.2016

The first Regional Advisory Committee (RAC) meeting of the Service Tax Mumbai Zone was convened at the, Air India Building, Conference Hall, 15th floor Nariman Point, Mumbai - 400021 on 26.02.2016 at 15.00 hours. Shri Piyusha Patnaik, Chief Commissioner, Service Tax, Mumbai Zone, presided over the meeting. The meeting was attended by following officials and representatives of the Trade Associations: 1) Shri R.P. Raheja, Ombudsman, Indirect Tax,

Mumbai. 2) Shri S.K. Das, Commissioner, Service Tax-V &

Audit - III, Mumbai. 3) Shri Sanjay Mahendru, Commissioner, Service Tax

- I & II, Mumbai. 4) Shri Rajeev Kapoor, Commissioner, Service Tax -

VI & VII, Mumbai.

5) Smt. M.R.R. Reddy, Commissioner, Service Tax -

IV, Audit - I & II, Mumbai. 6) Shri Navneet, Additional Commissioner, CCO,

Service Tax Zone, Mumbai. 7) Shri P.H. Thakur, Assistant Commissioner, CCO,

Service Tax Zone, Mumbai. 8) Shri V. Manickam, Secretary General, Life

Insurance Council, Mumbai. 9) Shri D.L. Desai, Trustee, Builders Association of

India, Mumbai. 2) The Chief Commissioner welcomed Shri R.P. Raheja,

Ombudsman, Indirect Tax, Mumbai, the representative of the Trade Associations and the officers present.

3) At the outset of the meeting, the Chief Commissioner

introduced Shri R.P. Raheja, who has been recently appointed as Ombudsman, Indirect Tax, Mumbai, and requested him to give brief guidelines to all the members about the functioning of the Ombudsman.

4) Shri R.P. Raheja, Ombudsman, thereafter gave a gist of

information regarding the powers and functioning of the Ombudsman and the procedures to be followed by the complainants and the department for redressing the grievances in a time bound manner. He also informed the details of the powers and duties of the Ombudsman, procedure for redressal of grievances, settlement of complaints by agreement and award by the Ombudsman which are set out in the indirect Tax Ombudsman Guidelines 2011, which are available at the CBEC website www.cbec.gov.in.

5) After a brief interaction with the representatives of the

trade Shri R.P. Raheja, Ombudsman took leave from the proceedings of the meeting.

The Regional Advisory Committee had listed out the points submitted by the confederation of Indian Industry (CII), The Indian Banks Association and The Builders Association of India in the Agenda for the meeting. However, since the representatives of the CII and The Indian Banks Association were not present for the meeting, the committee only took up the points raised by the Builders Association of India for discussion. I. point sponsored by the Builders Association of India : Issue: The Technical Officer, TRU, issued Report of High Level Committee's recommendation regarding valuation of flats for levy of service tax in letter F. No. 354/311/2015 - TRU dated 20.1.2016 (Copy Enclosed). This Letter confirms the view expressed in earlier circular No. 151/2/2012 - ST/10-2-2012 for valuation of the portion assigned / allotted to the landlord by the developer in consideration of the land / development right as opposed to the view expressed in the Education Guide. Following points arises out of this circular for our sympathetic consideration.

a) There is no confusion / doubt between the earlier circular and in the Education Guide that the consideration for construction service provided by the builder / developer is in form of the development right granted by the landlord.

b) The valuation of the consideration is required to be considered and not the valuation of the construction service. Thus, the development right is required to be valued.

c) The premise that value of "development right" is not ascertainable is incorrect, in as much state governments publishes yearly Stamp Duty Ready Recknor in which cost of land i.e. F.S.I. is stated. In fact this is required for levy of stamp duty on development right.

d) The developer purchase TDR and fungible FSI on his account in order to provide the construction service. In case of re-development of society building, the developer also pays some corpus fund to the society, charges for alternate accommodation, shifting allowance to the existing occupants / members. All these expenditure is incurred by the developer and does not form a part of consideration flowing from the landlord / society to the developer which is required to be valued for construction service provided by the developer. Hence, such expense should not be reckoned for the purpose of valuation of development right as a consideration.

e) In view of the forging, valuation of flats to be given to land owner can not be similar to the flats being sold to other flat purchasers, for the simple reason that the value of flats sold contains the value of land which is very substantial in a city like Mumbai. Further, the flats to be given to land owners are much prior to approval of plans by the Municipal Corporation. Furthermore, the right to obtain the flats accrues to the landlord from the development agreement itself which can never be equated with that of sale of flats to the purchasers as lot of activities are required to be done in between. It being so, the value of flat allotted to land owner is much lower than flat being sold to flat purchasers which takes place after commencement of work. It should not be lost sight that the service tax is on value of service provided and not of value of land.

f) So far as the timing of payment of service tax is concerned, the landlord / society absolutely transfer the development right only after getting the possession and making conveyance deed, till then it is merely a license to enter and complete the work in terms of the development agreement. It is done so as the landlord do not wish to alienate with right on the property till the project is complete. Allotment letter / development agreements are mere intentions and right does not pass on parties. There are cases where the High Court has removed the developer on a plaint of a landlord society for deficiency in work and new developer is brought in.

g) The above holds good even for re-development of

societies building or tenanted buildings where there is reconstruction of flats / tenements for members / tenants.

In view of above BAI requested to,

1. Adopt the Stamp Duty Ready Reckoner Rate (SDRR) published by Maharashtra Government every January for the purpose of arriving valuation of development agreement of the land owner portion and also the portion of free sale component of the developer, also land value or F.S.I. value. Income Tax Department also adopt SDRR.

2. Service Tax be payable on completion of service and not at the time of entering into development and re-development.

Decision: The matter discussed by the Builders Association of India at point a, b, and c have been addressed to by the Board vide circular issued vide letter F. No. 354/311/2015 - TRU dated 20.1.2016. Further, The Builders Association of India (BAI) have raised an issue of valuation for the purpose of charging Service Tax in respect of flats given to the land owner in lieu of developmental rights received from the said land owner. Basically, the issue pertains to the tri partite construction business model which has been explained at para 2.1 of the Circular dated 10th February, 2012 and also at para 2 of the Board's letter dated 20th January, 2016. Vide the letter dated 20th Jan., 2016, the Board has clarified that in the case of flats given to the land owner, the value of the consideration shall be determined in terms of Section 67(1)(iii) read with Rule 3(a) of the Valuation Rules. Whereas the BAI in their letter requested us to adopt the stamp duty ready reckoner rate published by the State Government for the purpose of arriving at the value for the developmental rights received from the land owner. The tripartite agreement can be understood in a different way as explained here. Let us say, the developer purchases the land from the land owner @ Rs. 100/- and constructs 25 flats over the said land at the cost of Rs. 100/-. Assuming that he makes a profit of Rs. 50/- on the project, he sells the said 25 flats each at Rs. 10/-. Thus, the total sales is Rs. 250/- whereas the cost is Rs. 100 + Rs. 100 i.e. Rs. 200/-. Here the said developer pays Service Tax on Rs. 250/- i.e. on each and every flat (assuming that each flat has been sold before getting OC). Whereas in the case of tri partite model, the builder does not purchase the land but promises to pay Rs. 100 to the land owners in the form of 10 flats, each valued at Rs. 10/-. Assuming the other parameters like construction cost and profit remaining the same and applying the principles of equity, the Government should get same amount of tax in both the similarly placed situations. If the argument of the BAI is accepted, there will be definitely mismatch of the taxable value in respect of flats given to the land owner as compared to the actual sale value of those flats.

In view of the above, this office is of the opinion that the taxable value shall be based on Section 67(1)(iii) read with Rule 3(a) of the Valuation Rules as specified by the Board's letter dated 20th Jan., 2016. The issue is regarding the point of Taxation i.e. when the tax liability arises in respect of flats given to the land owner. The possible dates of : (i) at the time of entering Tri partite agreement; (ii) at the time of getting approvals from the Competent

Authority; (iii) at the time of actual handing over the completed flat i.e.

when the flats are ready for occupation. This office is of the opinion that point of Taxation shall be either one or two above, whichever is later because at this time only the drawings would have been approved by the Competent Authority and there is a proper demarcation of flats to be given to the land owner. Another connecting issue is regarding taxability of flats given free to the existing owners of the houses in the case of redevelopment projects. As per the Board's circular dated 10th February, 2012, there shall be no Service Tax for the period before 12th July, in respect of the above flats, but for the post period July, 2012, the Service Tax - I commissionerate has already issued a Trade Notice vide F. No. V/ST-I/Tech-II 463/11 dated 31st August, 2012. Basically, in this model, the developer spends two monies, one for constructing flats to be given free to the existing flat owners and other money for constructing free sale flats. This office is of the opinion that : (i) The point of taxation shall be determined in similar

fashion as explained above; (ii) The service shall be classifiable as works contract

service as mentioned at para 6.2.2 of the education guide;

(iii) the value is required to be arrived at as per Sec 67(1)(iii) The other cost incurred by the developer like corpus fund to the society charges, alternate accommodation, shifting allowances to the existing occupants are all part of the value for charging service tax. 7. The meeting concluded with vote of thanks to all the

members present in the meeting. 8. This issues with the approval of the Chief

Commissioner, Service Tax, Mumbai Service Tax Zone.

Sd/- (P.H. Thakur)

Assistant Commissioner

F. No. IV/16-35/MSTZ/CCO - Tech/2015/808

Mumbai, the 22nd March, 2016

Copy to :

1. PS to the Chief Commissioner, Service Tax Mumbai

Zone.

2. The Ombudsman, Indirect Tax, Mumbai, 3rd floor,

Utpad Shulk Bhavan, Plot No. C-24, Sector - E, Bandra

- Kurla Complex, Bandra (East), Mumbai - 400 051.

3. The Directorate General of Taxpayer Services, CR

Building, IP Estate, New Delhi - 110109. w.r.t. letter

F.No.DTPS/5/2015 dated 10.09.2015.

4. Commissioner, Service Tax - I/II/III/IV/V/VI/VII/ Audit -

I/II/III, Mumbai.

5. All members of RAC, Service Tax Mumbai Zone.

Service Tax on Sale of Under Construction Flat

on ownership basis

Division Bench of Delhi High Court has held that levy of

Service Tax under Sec 66 of the Act read with Section

65(105)(zzzh) cannot be levied in respect of composite

contracts, such as 'Agreement of sale of under construction

flat on ownership entered into by real estate developers with

flat purchasers'. We are giving below the relevant extracts of

the order.

IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment delivered on: 03.06.2016

W.P.(C) 2235/2011 SURESH KUMAR BANSAL ..... Petitioner Through: Mr Puneet Agrawal and Mr Sahil Kahol, Advocates.

versus

UNION OF INDIA & ORS. ..... Respondents Through: Mr Vivek Goyal, CGSC with Mr. Prabhakar

Srivastav, Advocate for UOI. AND

W.P.(C) 2971/2011 ANUJ GOYAL & ORS. ..... Petitioners Through: Mr Puneet Agrawal and Mr Sahil Kahol, Advocates.

versus UNION OF INDIA & ORS. ..... Respondents

Through: Mr Vivek Goyal, CGSC with Mr Prabhakar

Srivastav, Advocate for UOI. Mr Sanjoy Ghose, Additional Standing Counsel for the

GNCTD with Mr Yash S. Vijay, Advocate for R-3/GNCTD. CORAM: JUSTICE S.MURALIDHAR JUSTICE VIBHU BAKHRU

JUDGMENT VIBHU BAKHRU, J 1. The Petitioners are individuals who have entered into

separate agreements with a builder (M/s Sethi Buildwell Pvt. Ltd. - hereafter 'the builder') to buy flats in a multi-storey group housing project named – Sethi Group - Max Royal being developed by the builder in Sector 76, Noida, Uttar Pradesh.

2. The builder has in addition to the consideration for the flats also recovered service tax from the Petitioners, which is payable by him for services in relation to construction of complex and on preferential location charges.

3. The Petitioners are aggrieved by the levy of service tax on services 'in relation to construction of complex' as defined under Section 65 (105)(zzzh) of the Finance Act, 1994 (hereafter 'the Act') and inter alia impugn the explanation to Section 65(105)(zzzh) of the Act (hereafter ‘the impugned explanation') introduced by virtue of Finance Act, 2010 as being ultra vires of the Constitution of India. The Petitioners also impugn Section 65(105)(zzzzu) of the Act which seeks to subject preferential location charges charged by a builder to service tax. The Petitioners state that their agreement with the builder is a composite contract for purchase of immovable property and contend that in absence of specific provisions for ascertaining the service component of the said agreement, the levy would be beyond the legislative competence of the Parliament.

4. The controversy involved in these petition relates to the question whether the consideration paid by flat buyers to a builder/promoter/developer for acquiring a flat in a complex, which is under construction/development, could be subjected to levy of service tax. According to the Petitioners, the agreements entered into by them with the builder are for purchase of immovable property and the Parliament does not have the legislative competence to levy service tax on such transaction. The Petitioners further claim that the Act and the rules made thereunder do not provide any machinery for computation of value of services, if any, involved in construction of a complex and, therefore, no such tax can be imposed.

Submissions 5. Mr Puneet Agrawal, the learned counsel appearing for

the Petitioners contended that the entries relating to taxation in List I and List II of the Seventh Schedule to the Constitution of India were mutually exclusive and the Parliament did not have the power to levy tax on immovable property; thus, the levy of service tax on agreements for purchase of flats was beyond the legislative competence of the Parliament.

27. It is a usual practice for builders/developers to sell their

project at its launch. Builders accept bookings from prospective buyers and in many cases provide multiple options for making payment for the purchase of the constructed unit. In some cases, prospective buyers make the payment upfront while in other cases, the buyers may opt for construction linked payment plans, where the agreed consideration is paid in instalments linked to the builder achieving certain specified milestones. Whilst it may be correct to state that the title to the unit (the immovable property) does not pass to the prospective buyer at the stage of booking, it can hardly be disputed that the buyer acquires an economic stake in the project and in one sense, the services subsumed in construction - services in relation to a construction the complex - are rendered for the benefit of the buyer. However, but for the legal fiction introduced by the impugned explanation, such value add would be outside the scope of services because sensu strict no services, as commonly understood, are rendered in a contract to sell immovable property.

30. The imposition of service tax by virtue of the impugned

explanation is not a levy on immovable property as contended on behalf of the Petitioner. The clear object of imposing the levy of service tax in relation to a construction of a complex is essentially to tax the aspect of services involved in construction of a complex the benefit of which is available to a prospective buyer who enters into an arrangement - whether by way of an agreement of sale or otherwise - for acquiring a unit in a project prior to its completion/development.

35. Having stated the above, it is also essential to examine

the measure of tax used for the levy. The measure of tax must have a nexus with the object of tax and it would be impermissible to expand the measure of service tax to include elements such as the value of goods because that would result in extending the levy of service tax beyond its object and would impinge on the legislative fields reserved for the State Legislatures.

37. Undisputedly, the contract between a buyer and a

builder/promoter/developer in development and sale of a complex is a composite one. The arrangement between the buyer and the developer is not for procurement of services simplicitor. As noticed hereinbefore, an agreement between a flat buyer and a builder/developer of a complex - who is developing the complex for sale is, essentially, one of purchase and sale of developed property. But, by a legislative fiction, such agreements, which have been entered into prior to completion of the project and/or construction of a unit, are imputed with a character of a service contract; the works involved in construction of a complex are treated as being carried by the builder on behalf of the buyer. However, indisputably the arrangement between the buyer and the builder is a composite one which involves not only the element of services but also goods and immovable property. Thus, while the legislative competence of the Parliament to tax the element of service involved cannot be disputed but the levy itself would fail, if it does not provide for a mechanism to ascertain the value of the services component which is the subject of the levy. Clearly service tax cannot be levied on the value of undivided share of land acquired by a buyer of a dwelling unit or on the value of goods which are incorporated in the project by a developer. Levying a tax on the constituent goods or the land would clearly intrude into the legislative field reserved for the States under List II of the Seventh Schedule of the Constitution of India.

39. In the present case, we find that there is no

machinery provision for ascertaining the service element involved in the composite contract. In order to sustain the levy of service tax on services, it is essential that the machinery provisions provide for a mechanism for ascertaining the measure of tax, that is, the value of services which are charged to service tax.

43. For the purposes of ascertaining the value of services, the Central Government has made Service Tax (Determination of Value) Rules 2006 (hereafter 'the Rules'). However none of the rules provides for any machinery for ascertaining the value of services involved in relation to construction of a complex.

52. It was stated that an Assessee is entitled to abatement

to the extent of 75% and only 25% of the gross amount charged by a builder from a flat buyer is charged to service tax. It was suggested on behalf of the Revenue that this indicated that the value of the immovable property as well as the property in goods incorporated in the works would stood excluded. In our view, this issue also stands concluded against the Revenue by the judgment in the case of Commissioner

of Central Excise v. Larsen and Toubro Limited (supra). In that case, the Supreme Court had affirmed the decision of the Orissa High Court in Larsen and Toubro Limited v. State of Orissa and Ors:

(2008) 12 VST 31 (Orissa) wherein the Court held that Circulars or other instructions could not provide the machinery provisions for levy of tax. The charging provisions as well as the machinery for its computation must be provided in the Statute or the Rules framed under the Statute. The relevant extract from the decision of the Orissa High Court is reproduced below:

"This Court is of the opinion that if the Act is

unworkable in the absence of necessary Rules, as has been held by several judgments referred to above, any assessment under the said Act cannot be enforced even if such an assessment order is made by an authority under the Act purportedly in accordance with the provisions of the Act. The inherent infirmity of an assessment order passed on the basis of circulars which have no statutory sanction cannot be cured by an appellate order. In other words, if the assessment order itself is not sustainable on account of unworkability of the provisions under which they are purportedly made, no purpose would be served by filing appeal against the said order and this question cannot be decided by the appellate authority under the Act. In the instant case, both the assessing officer and the appellate authority are bound to follow the instructions contained in the circulars. Therefore, no purpose would be served by filing appeal before the appellate authority. In order to constitute valid basis for taxation, the rate of deduction, specially a flat rate of deduction cannot be applied to calculate the taxable turnover in works contract. So those circulars cannot hold the field. As stated in the judgments referred to above, in the absence of any statutory basis for calculation of taxable turnover, the Act remains unworkable. Such gap in the statute cannot be filled up by the circulars which are purely ad hoc and administrative in nature and specially so when it relates to taxing law. It is a well-settled principle that in matters of taxation

either the statute or the Rules framed under the statute must cover the entire field. Taxation by way of administrative instructions which are not backed by any authority of law is unreasonable and is contrary to Article 265 of the Constitution of India. Therefore, the impugned circulars are set aside as also the impugned orders of assessment. The assessee's liability to pay tax remains but in order to assess that the State has to act in accordance with the statutory prescription by framing Rules under its rule-making power under Section 29 of the Act and the assessing authority can pass fresh orders of assessment on the basis of such statutory Rules."

53. As noticed earlier, in the present case, neither the Act

nor the Rules framed therein provide for a machinery, provision for excluding all components other than service components for ascertaining the measure of service tax. The abatement to the extent of 75% by a notification or a circular cannot substitute the lack of statutory machinery provisions to ascertain the value of services involved in a composite contract.

54. . . . . . . . . . . . As stated earlier, service tax is a tax on

value addition and charges for preferential location in one sense embody the value of the satisfaction derived by a customer from certain additional attributes of the property developed. Such charges cannot be traced directly to the value of any goods or value of land but are as a result of the development of the complex as a whole and the position of a particular unit in the context of the complex.

55. In view of the above, we negate the challenge to

insertion of clause (zzzzu) in Sub-section 105 of Section 65 of the Act. However, we accept the Petitioners’ contention that no service tax under section 66 of the Act read with Section 65(105)(zzzh) of the Act could be charged in respect of composite contracts such as the ones entered into by the Petitioners with the builder. The impugned explanation to the extent that it seeks to include composite contracts for purchase of units in a complex within the scope of taxable service is set aside.

56. These petitions were admitted by an order dated

21.07.2011 and the applications for stay of recovery filed along with the petitions were disposed of by directing that if any amount is collected on the basis of the impugned explanation, the same shall be refunded with the interest in case the Petitioners succeed. Accordingly, the concerned officer of Respondent No. 1 shall examine whether the builder has collected any amount as service tax from the Petitioners for taxable service as defined in Section 65(105)(zzzh) of the Act and has deposited the same with the respondent authorities. Any such amount deposited shall be refunded to the Petitioners with interest at the rate of 6% from the date of deposit till the date of refund.

57. The petitions are disposed of in the aforesaid terms.

VIBHU BAKHRU, J S.MURALIDHAR, J

JUNE 03, 2016 RK

BAI and Union Budget 2016-17 In our March 2016 issue, we had printed 'Union Budget 2016-

17 - a glance'., wherein we gave broad contours of the budget

and information affecting the building and construction

industry.

In the Union Budget 2016-17, the exemption of Excise Duty on

Ready Mix Concrete was restored, but w.e.f. from 1st March,

2016.

Mr. Anil Zinzuwadia, Vice-President, BAI through the good

offices of Mr. Narayanbhai Kachhadiya, Member of

Parliament from Amreli, Gujarat, gave a post-Budget

memorandum to the Hon'ble Union Finance Minister and also

to the Union Revenue Secretary, wherein he has raised the

issue of retrospective exemption of Excise Duty on R.M.S. and

other issues of concern affecting the building and construction

industry. Also Mr. Nitesh Jain of M/s N. J. Jain & Associate

and Mr. Gopal Sharma of M/s Kunal Structure from Rajkot

along with Mr. Narayanbhai Kachhadiya, met the Hon'ble

Union Finance Minister and Union Revenue Secretary on 10th

March, 2016 and impressed upon them to issue a suitable

notification exempting RMC retrospectively. We are printing

below the said post-beget memorandum.

Dated 31st March, 2016 Mr. Arun Jaitely Hon'ble Finance Minister of India North Block, New Delhi 110001

The Revenue Secretary Ministry of Finance, Government of India North Block, New Delhi 110001

Respected Sir,

Sub.: Post Budget Memorandum As the outset we would like to convey our special regards and gratitude to the Ministry of Finance for positively considering several suggestions made by us during the pre-budget meeting held at North Block on 21.02.2016 with your good self. This action of the government has had a very positive impact on the industry and given it a lot of confidence for the future both in terms of future interactions with government as well as in terms of continuing to business in such a gloomy environment. It is after a long time that the country has seen such a receptive government at the centre. And now continuing our interactions which started with the pre-budget memorandum, we would now like to submit our

post budget memorandum containing few more steps to be considered to achieve the last mile objective of the budgetary provisions. Please grant us suitable time to personally represent the issues as per the attached post budget memorandum. This Post Budget Memorandum highlights the suggestions and concerns of the members as well as industry. It is requested to consider these suggestions so that the same may be taken care of while passing the Budget in the Parliament. If any suggestions or clarifications are desired, then we shall be pleased to furnish the same. We once again thank you for the opportunity given to us for submitting our views and suggestions.

Anil Zinzuwadia Vice President

Builders' Association of India

Post Budget Memorandum 2016

Excise Duty 1. Ready Mix Concrete (RMC) manufactured at site Vide Notification No. 12/2016 effective 1.3.2016 RMC

manufactured at site has been exempted prospectively by way of substitution of below entry.

Suggestion: Excise duty exemption, which was earlier limited to Concrete Mix (CM) only, now being extended to Ready Mix Concrete (RMC) manufactured at construction site for construction work. This is among the one of the rare scenarios in which Government has nullified the effect of Supreme Court judgement which was decided in favour of revenue earlier. In the case of Larsen and Tubro Ltd Vs. CCE, Hyderabad dated 06 October 2015, the Apex court adopted strict interpretation for dealing with the Exemption Notification no. 4/1997-C.E. (as amended by 12/2012-C.E.) and denied the excise duty exemption on Ready Mix Concrete (RMC). The Apex Court held that Concrete Mix and Ready Mix Concrete are separate products, thus exemption available to Concrete Mix can not be extended to Ready Mix Concrete. Notification 12/2012-C.E. dated 17-03-2012 has been suitably amended vide Notification no. 12/2016-C.E. effective from 01-03-2016 so as to include Ready Mix Concrete for providing exemption from Excise duty along with Concrete Mix.

However our plea is that the same should be exempted retrospectively.We fervently request Government to consider for issuance of clarification on the availability of central excise exemption for RMC manufactured at site of construction and used in the construction work of such site as presently understood for 'Concrete Mix' in line of Notification No. 4/97 CE with effect from 01.03.2011 and under 12/2012 CE with effect from 17.03.2012. Service Tax: 2. Section 67A of Finance Act, 1994 [Clause 148 of

Finance Bill, 2016 and Sl. No. 2(1) of notification No. 10/2016-ST]

• The present section 67A states that The rate of

service tax, value of a taxable service and rate of exchange, if any, shall be the rate of service tax or value of a taxable service or rate of exchange, as the case may be, in force or as applicable at the time when the taxable service has been provided or agreed to be provided. Now the said sectionis proposed to be amended to obtain specific rule making powers in respect of Point of Taxation Rules, 2011. Point of Taxation Rules, 2011 has also been amended accordingly.

Issue: • However, when the section 67A gets amended, two

Explanations have been added to Rule 5 of Point of Taxation Rules, 2011, wherein it is clarified that the said rule applies also in cases of new levy. The second explanation provides that unless the transaction satisfies the conditions provided in Rule 5, the same shall be taxable. The conditions provided in Rule 5 are reproduced below:

Where a service is taxed for the first time, then, -

• no tax shall be payable to the extent the invoice has

been issued and the payment received against such

invoice before such service became taxable;

• no tax shall be payable if the payment has been

received before the service becomes taxable and

invoice has been issued within fourteen days of the

date when the service is taxed for the first time.

Explanation 1.- This rule shall apply mutatis mutandis in case

of new levy on services. Explanation 2.- New levy or tax shall

be payable on all the cases other than specified above.

• The above explanations have been inserted in Rule 5 vide Notification No. 10/2016 –ST Dated 1-3-2016, w.e.f. 1st day of March, 2016.

• The above explanation raises a fundamental question as to whether a service which has already been provided prior to introduction of levy could be taxed on raising of invoice or receiving payment subsequently. One needs to distinguish between the taxable event (event deciding taxability) vis-à-vis a payment event (event deciding timing of payment). Further, in the case of Collector of

C.Ex Hyderabad VsVazir Sultan Tobacco Co Ltd 1996 (83) E.L.T. 3 (SC), it has been held that manufacturing is a taxable event whereas payment of excise duty is at the time of the removal of goods, therefore in a case where

goods have been manufactured at the time when they were not excisable, there cannot be a duty liability at the time of removal of such goods.

• Thus, the date of rendition of service is totally gets ignored because of above amendment creating a conflict between Section 67A(1) and 67A(2).

Suggestion It is suggested that section 67A of the Finance Act should not be amended or any other legislative change may be brought in whereby the supremacy of the time of rendition of service for the purpose of taxation remains to be made.

1. Clarification regarding the meaning of ‘failed to pay

amount collected as service tax’ in the Notification No 13/2016-ST dated 01.03.2016

• Section 75 of the Finance Act, 1994 prescribes rate of interest that is to be paid in case of delay in payment of service tax. The rate of interest was 18% p.a. upto six months, 24% p.a. where the period of delay is upto six months but upto one year, and 30% p.a. where period of delay exceeds more than one year. Vide Notification No 13/2016-ST, the rate of interest has been amended so as to state that where a person has collection of any amount as service tax but failing to pay the amount so collected to the credit of the Central Government on or before the date on which such payment becomes due, the rate of interest is 24% and in other cases, it is 15%

Issue: In the notification, the meaning of the term ‘collection of any amount as service tax’ has not been clarified. As a reason, one may take a view that where invoice has been issued and service tax is shown separately, then service tax is said to have been collected. Further, wherein the consideration charged, the service tax is not charged separately and amount is received, then also it will be treated as ‘collection of any amount as service tax’. For example, where an invoice has been made for INR 1,00,000.00 and tax rate is 14.5% (including SBC), in such case, total value of invoice is INR 1,14,500.00. The

invoice has been made in December 2016. The due date is 6th

January, 2016. The amount is collected in 15th August, 2017

and tax has been deposited to the Government on 30th September, 2017. In this case, whether the interest will be

15% from 6th January, 2016 to 15th August, 2017 and 24%

from 16th August, 2017 to 30th September, 2017 or will it be

24% from 6th January,2016 to 30th September, 2017. Further, what will be the situation where only a part of the amount is collected and remaining amount is not collected? Say a client pays only Rs100,000 specifically stating that the amount towards service tax has been withheld in such case, whether the interest rate will be 15% or 24%.

Suggestion: • It is suggested that a suitable clarification be issued for

clarifying as to when it will be treated as ‘amount collected as service tax’ and the rate of 24% should

apply from the date of actual collection and not from the date when the tax is due.

2. Service Tax exemption to canal, dam or other

irrigation works with retrospective effect. [Clauses

156 of the Finance Bill, 2016 / New section 101 in the

Finance Act, 1994] • Definition of Governmental authority was

amended with effect from 30.01.2014 so as to exempt services provided by way of construction, erection, maintenance, or alteration etc. of various works as listed under Entry 12 and 25 of the Mega Exemption Notification. However, services provided prior to 30.01.2014 to such bodies remained taxable. The benefit of exemption is proposed to be extended to the said services

provided during the period from the 1st July, 2012 to 29.01.2014.

Issue: Because of the above amendment, only the services of canal, dam or other irrigation works provided to the Government, a local authority or a governmental authority is covered. Thus, other services as listed under entry 12 and 25 as on 1.7.2012 provided to the Government, a local authority or a governmental authority should also be treated at par for the purpose of granting this retrospective exemption.

Suggestion: • It is suggested that the said benefit be extended to all the

items covered under Sr No 12 and 25 of Notification No 25/2012-ST dated 20.06.2012.

3. Restoration of certain exemptions withdrawn last

year for projects, contracts in respect of which were entered into before withdrawal of the exemption [Clauses 156 of the Bill/ New section 102 in the Finance

Act, 1994] • Exemption from Service Tax on services provided

to the Government, a local authority or a governmental authority by way of construction, erection, etc. of -

(i) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;

(ii) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment;

(iii) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65B of the said Act; was withdrawn with effect from 1.4.2015. The same is being restored for the services provided under a contract which had been entered into prior to 01.03.2015 and on which appropriate stamp duty, where applicable, had been paid prior to that date. The exemption is being restored till 31.03.2020.

Issue • The exemption is there only when the services has been

to the Government, a local authority or a governmental authority.

• One of the condition is that if the appropriate stamp duty has been paid prior to 01.04.2015. However, as per Article 285(1) of the Constitution of India, ‘The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State’.

• Thus, there would not be a case wherein stamp duty has been paid in a contract with the Government.

• Similar will be the case for exemption that has been provided to services provided by way of construction, erection, etc. of original works pertaining to an airport, port.

Suggestion • It is suggested that the word ‘and on which appropriate

stamp duty, where applicable, had been paid before that date’ may be deleted from proposed section 102(1) and section 103(1) in the Finance Act, 1994 as the party issuing the contract is government itself.

4. Service Tax Exemptions to low cost houses (new entry

at S. No. 14 (ca) of notification No. 25/2012-ST refers) • Services by way of construction, erection, etc., of

original works pertaining to low cost houses up to a carpet area of 60 sq.m per house in a housing project approved by the competent authority under the “Affordable housing in partnership” component of PMAY or any housing scheme of a State Government are being exempted from service tax.

Issue • These days, many areas are being developed, be it slums

or otherwise, by Government as well as private parties. However, the exemption is available only when a housing project approved by the competent authority under the “Affordable housing in partnership” component of PMAY or any housing scheme of a State Government.

Suggestion: a) It is suggested that exemption may be granted in this

regard to all categories, whether public or private. Also a lot of confusion prevails whenever the government uses the words competent authority without properly defining it. The above is one such case, where the project is awarded but practically no one is aware of who the competent authority is. It is thus suggested either to drop the word or explain it by way of a definition. Such exemption was there under Notification 25/2012 (clause 14C) but was for those housing projects approved by competent authority empowered under the ‘scheme of Affordable Housing in partnership framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India’.

5. Exemption to 13 (ba) a civil structure or any other

original works pertaining to the ‘‘In-situ

rehabilitation of existing slum dwellers using land as a resource through private participation’’ under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana, only for existing slum dwellers. (new entry at S. No. 13 (ba) of notification No. 25/2012-ST refers).

Issue: • A lot of rehabilitation activity is taking place for slum

dwellers where the land is allotted by the government at a location distant from the existing slums. Will the above exemption because it carries the words “In-situ” restrict the exemption to only those constructions which take place exactly at the same location of residence of the slum dwellers. Further the condition of ‘‘In-situ rehabilitation” and only for “existing dwellers” are not very clear:

a) The purpose of such project is rehabilitation of slum dwellers, whether the development is done on the same land or at other land.

b) In the event if few of slum dwellers do not agree to accept houses build for their rehabilitation, the Tax exemption for entire project should not be disallowed.

c) What is the meaning of ‘Beneficiary led individual housing construction’ ?

Suggestion: • In such a scenario we propose to remove the word “in-

situ” for ensuring that the exemption is actually useful. 6. Abatement in case of ‘construction services’

[Amendment in entry at S. No. 12 of notification No.

26/2012-ST] • At present, the abatement available under S. No 12

of notification 26/2012-ST dated June 20, 2012 for construction of a complex, building, civil structures etc. is 70% for construction other than residential properties as well as residential properties having a carpet area of more than 2000 sqft or where the amount charged exceeds Rs 1 crore and 75% in other cases.

• Now, a uniform abatement at the rate of 70% is now being prescribed for services of construction of complex, building, civil structure, or a part thereof under Sr No 12 of Notification No. 26/2012-ST.

Issue: • The prices of commercial property will be higher

compared to residential property, as a reason, marginal service would be higher in such case.

• Moreover, in case of high valued house i.e., house having a carpet area of more than 2000 sqft or where the amount charged exceeds Rs 1 crore, in such case, the value of service gets marginally increased.

• Considering this reason, the two rates of abatement would have been made, one for residential as well as other for commercial and high valued residential house.

• However, now treating all the constructions as same

would increase the cost for residential houses and will hit the low and middle income groups.

Suggestions: • It is suggested that the existing abatement rates of 70%

for construction other than residential properties as well as residential properties having a carpet area of more than 2000 sqft or where the amount charged exceeds Rs 1 crore and 75% in other cases be retained.

7. ‘Services provided by Government’ • Section 66D of Finance Act, 1994 provides that service

by Government or a local authority excluding support services provided to business entities is exempt from service tax. Finance Act, 2015 has sought to tax any services provided to business entities. This means the business entity receiving such service would be person liable to pay service tax under reverse charge.

• Consequently, notification No. 30/2012-ST is being amended so as to delete the words “by way of support

services appearing at Sl. No. 6 of the Table in the said

notification with effect from 1st April, 2016. Issue: • These amendment brings to prominence the importance

of the concept of “service” in contradiction to the performance of a statutory function. Any function which is a statutory function required to be performed by the Government cannot be considered as a rendition of service. In fact, it is the necessary requirement of the Government to perform that function and the requirement of the citizen to obtain that function.

• Thus, charges/ Fess/ amount charged by DGFT, MCA for various services provided to business entities have been inadvertently proposed to be made liable to Service Tax. This also leads to the conclusion that sovereign functions of the Government will also be liable to service tax which cannot be the intention of the legislature.

Suggestion: • It is suggested that an appropriate clarification in this regard be provided.

Union Budget 2017-18 and BAI Tax Research Unit, Department of Revenue, Union Ministry of

Finance vide its letter dated 6th

October 2016 called for

suggestions from BAI for consideration while framing Union

Budget 2017-18 vis-a-vis changes in Direct and Indirect

Taxes. We are reproducing herein below the suggestions sent

by BAI.

No. BAI/DO/2016 4th November 2016 Shri Abhishek Verma Budget Officer (TRU) Ministry of Finance, Department of Revenue Tax Research Unit, 146-G, North Block, New Delhi - 110011.

Subject: Pre-Budget Meeting for Union Budget 2017-18. Dear Sir, Please refer your letter No.334/12/2016-TRU on the captioned subject. Builders’ Association of India is pleased to submit the points for consideration in the Union Budget with regard to the construction industry / infrastructure projects. The same are given hereunder :- 1. Clarification regarding definition of Government Finance Act 2015 introduced the definition of the term ‘Government’ by insertion of Clause 26A under Section 65B of the which reads as “Government” means the Departments of the Central Government, a State Government and its Departments and a Union territory and its Departments, but shall not include any entity, whether created by a statute or otherwise, the accounts of which are not required to be kept in accordance with article 150 of the Constitution or the rules made thereunder. Issue The definition specifically provides State Governments and Union Territories to include their departments. However, in respect of Central Government, only Departments of the Central Government are covered under the ambit of the term ‘Government’ and not the term CENTRAL Government. Suggestion It is suggested that a suitable clarification be issued as to whether the Central Government would form part of the ‘Government’ or not while interpreting definition of the term ‘Government’ in order to determine taxability of a service under the Finance Act.

2. Definition of Works Contract As per section 65B (54) "works contract" means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property As per Section 2 of Central Sales Tax Act, 1956 “works contract” means a contract for carrying out any work which includes assembling, construction, building, altering, manufacturing, processing, fabricating, erection, installation, fitting out, improvement, repair or commissioning of any movable or immovable property Issue There exists a disparity between the definition of works contract between Finance Act, 1994 and Central Sales Tax Act, 1956 which leads to different interpretation of the law under different statutes.

Suggestion It is suggested that the definition of works contract under Finance Act, 1994 be amended in line with the definition of works contract under CST Act, 1956 to bring in parity between the two.

3. Service tax on recoveries towards electricity supplies Section 66D (k) of Finance Act, 1994 dealing with negative list of services lists transmission or distribution of electricity by an electricity transmission or distribution utility as one of the services under Negative List. Further, Section 66B(23) defines ‘electricity transmission or distribution utility’ as ‘the Central Electricity Authority; a State Electricity Board; the Central Transmission Utility or a State Transmission Utility notified under the Electricity Act, 2003; or a distribution or transmission licensee under the said Act, or any other entity entrusted with such function by the Central Government or, as the case may be, the State Government and the definition of services excludes ‘transfer of property in goods’. Also, Electricity constitutes “goods” under the VAT and Central Excise laws and judicial precedents have upheld this view. Excisable goods are defined under Section 2(d) of the Central Excise Act, 1944 as “goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as being subjected to a duty of excise and includes salt”. Electricity is though specified in the CETA under Tariff Item 2716 00 00 but thesame is presently not being subjected to any duty of excise and, therefore, it does not come under excisable goods. Further, prior to 1.7.2012, activities relating to transmission or distribution were clearly exempt from service tax and there is no reason why State/Central Government utilities should be saddled with litigation on this count as by the statute governing them they cannot carry out any activity except in relation to transmission or distribution. Therefore, this exemption for activities relating to transmission or distribution should be restored. Issue: Various developers of real estate parks supply electricity to their tenants (either generated through the DG sets or obtained from the state electricity board). However, only electricity transmitted or distributed by an electricity transmission or distribution utility is specifically exempted under service tax. No specific exemption has been provided for electricity supplied by developers to its tenants. Suggestion It is suggested that to remove the ambiguity, it may be clarified that charges/ recoveries for supply of electricity by developers is not covered under the purview of service tax. Alternatively, if the electricity supply needs to be taxed, it be suitably clarified and the valuation mechanism for the same be suggested accordingly.

4. Levy of Service Tax on amount recovered towards penalty, fines, liquidated damages or any other recoveries from other person.

Section 66B of the Finance Act provides that service tax is leviable at the rate of 14% on the value of services, other than those specified in the Negative List, provided or agreed to be provided in the taxable territory by one person to another. Section 65B(44) of the Act defines the term “service “ to mean any activity carried out by a person to another for a consideration, including declared services. The term “activity” has not been defined in the Act. The ministry of Finance, in the Guidance Note dated 20.06.2012 has observed that in the absence of any specific definition the term “activity” shall be given the meaning as it is understood commonly to include an act done, a work done, a deed done, an operation carried out , execution of an act , provision of afacility etc. It is further stated that activity could be active or passive and would also include forbearance to act.

5. As per Sec 66E(e) of the Finance Act, 1994, “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act” shall be a declared service and liable to service tax.

It is clear form above that in order to attract the levy of service tax, there should be an activity and the activity should be undertaken by one person to another person for another.

Issue The Central Excise Department in some cases is demanding service tax on amount recovered towards penalty, fines, liquidated damages or any other recoveries from other person. It is important to note that such recoveries done by the customer is not a consideration for any service provided by the customers to its vendors as there exists no reciprocity in such cases and the amount recovered from vendor is in the nature of compensation only. In contract, compensation is being paid by one of the contracting parties to the other for any loss or injury caused to the latter by some conduct in breach of the terms of the contract.

CBEC vide Circular No 96/7/2007/-ST dated 23.08.2007 has clarified that an amount collected for delayed payment of telephone bill is not to be treated as consideration charged for provision of telecom service and therefore, does not form part of the value of the taxable services under section 67 read with Service Tax ( Determination of Value) Rules, 2006. It has further been provided that detention charges collected to hold a marine container beyond the holding period is determined by the shipping companies/steamer agent is not chargeable to service tax, the same being in the nature of a “penal rent” not a consideration for a service. Suggestion It is suggested that suitable amendment be made to provide that penal rates, charges, fines, liquidated damages etc. are not liable to Service tax. 6. Manner of determination of Value in case where the

whole consideration is not in money

Rule 3 of Service Tax (Determination of Value) Rules, 2006 reads as subject to the provisions of section 67, the value of taxable service, [where such value is not ascertainable], shall be determined by the service provider in the following manner :- (a) the value of such taxable service shall be equivalent to the gross amount charged by the service provider to provide similar service to any other person in the ordinary course of trade and the gross amount charged is the sole consideration; (b) Where the value cannot be determined in accordance with clause (a), the service provider shall determine the equivalent money value of such consideration which shall, in no case be less than the cost of provision of such taxable service.

Issue This method of valuation wherein a comparable price or price equivalent to similar service is taken as the value of the service may lead to different results under different situations. There is no fixed formula for determination of Valueas in the case of Excise Valuation Rules. For Example: in cases where Corporate Guarantee is provided it is difficult to determine the value of services. Suggestion It is suggested that the provision be amended to provide a Deemed Consideration Mechanism wherein cost plus some deemed margin (may be 10%) be taken as value of Services on the similar lines as provided under Rule 8 of Excise Valuation Rules, wherein the Value of the Goods is taken as 110% of cost of the Goods. 7. Value of service portion in respect of certain works

contracts be reduced Notification 11/2014- ST dated 11-07-2014 has amended taxability of Service Portion of Works Contracts related to maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property with effect from 1st October 2014. Taxable Value will be 70% of Total Amount Charged for the works contract other than original works. Before Amendment, Service Portion in respect of Works Contracts related to maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property was 60% of Total Amount Charged for the works contract Issue Most of the States provide standard deduction to the extent of 30% in case of works contract related to maintenance, repair, reconditioning or restoration or servicing of any goods or maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property. Rest 70% is chargeable to VAT considering the sale of material in case of

works contract. In case of aforesaid services it may be noted that, cost of material used is on a higher end. 70% is already chargeable to VAT and with this amendment another 70% is chargeable to Service Tax. This leads to payment of Taxes on 140% of the value which in itself is a hardship Suggestion It is suggested that taxability of Service Portion of Works Contracts related to maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property be restored to 60%. Exemptions/ Abatements/ Rebates 8. Basic Exemption Limit for Small Service Providers The service tax exemption limit for small service providers in terms of Notification No. 33/2012 ST dated 20.06.2012 is currently limited to ` 10,00,000/-It is proposed to extend the exemption limit due to the following reasons: (i) Small service providers are poor, uneducated and mainly in the unorganized sector. (ii) Limit was not enhanced since 1st April, 2008 (iii) After 1.7.2012 post Negative list era, more services are under the ambit of service tax, which earlier was not includible in the exemption limit.

Suggestions � It is suggested to extend the exemption limit to ` 20,00,000/-. It is suggested to clarify that for calculation of applicability of SSP exemption limit, the value of service provided would be taken after the abatement, if any applicable to the service 9. Exemption for Goods Transport Agency (GTA) Tax on GTA services was introduced on 01.01.2005 vide Notification Nos. 33/2004-S.T, 34/2004-S.T, 35/2004-S.T., dated 03.12.2004. Clause 21 (b) & (c) of Notification No. 25/2012 dated 20.06.2012 exempts taxable services provided by a goods transport agency to a customer, in relation to transport of goods by road in a goods carriage, from the whole of service tax leviable thereon where: the gross amount charged for the transport of goods on consignments transported in a goods in a single carriage does not exceed 1500/- ; or the gross amount charged for the transportation of all such goods for a single consignee does not exceed 750/-. Suggestion Considering the increase in cost of transportation since 2004, it is suggested that the exemption limit be enhanced to 4,000/- for single carriage and 2,000/- for a single consignee.

10. Clause 25 of Mega Exemption Notification - Services

provided to Government, a local authority or a governmental authority

Clause 25 of Notification No. 25/2012 dated 20.06.2012 exempts Services provided to Government, a local authority or a governmental authority by way of – (a) water supply, public health, sanitation conservancy, solid waste management or slum improvement and up-gradation; or (b) repair or maintenance of a vessel; Suggestion It is suggested that all functions entrusted to a municipality under Article 243W of the Constitution be covered in clause 25 of the mega exemption notification

11. Manpower Supply Service- appropriate exemption/abatement be provided

Any person engaged in providing any service, directly or indirectly in any manner for recruitment or supply of manpower, temporarily or otherwise to any other person is liable to service tax. Issue While providing such manpower services, agency has to pay salary of its deputed employee and statutory dues such as ESI, EPF. Agency collects its fees for supplying manpower from the service recipients. Further, no CENVAT credit is accrued on these services due to which cost of supply of manpower is very huge. Suggestion It is suggested that in respect of Manpower Supply Services, appropriate abatement be allowed in respect of Salary payable, ESI/EPF or the cost of Salary payable to its deputed employee by manpower or recruitment supply agency is allowed as deductions from the Gross Value Charged on the concept of pure agent. .

Alternatively, it is suggested that only the Agency Charges be made liable to Service Tax. Where such charges cannot be disclosed separately, a Chartered Accountants certificate be obtained for such a purpose.

12. Abatement on Construction Services & Inclusion of

Land Value in case of Construction of a complex, building, civil structure

Abatement Notification No. 26/2012 dated 20.06.2012 provides regarding abatement of Construction Services.

Suggestion It is suggested that appropriate mechanism be provided to exclude or reduce the value of Land in case of Construction of Complex, Building, Civil Structure etc. where the Circle rate value of land is more than 75% of the Total value of construction service including of land.

Alternatively, Rule 2(a) of Service Tax (Determination of Value) Rules, 2006 be suitable amended to provide an option to reduce the value of land where the Circle rate value of land is more than 75% of the Total value of construction service including of land.

13. Provision for Bad Debts W.e.f. 01.04.2011, payment of service tax has been shifted from receipt basis to accrual basis in case receipts of the service provider exceed ` 50 Lakh in thepreceding financial year vide Point of Taxation Rules, 2011. In this system, there are no provisions for bad debt adjustments and the service providers are forced to pay service tax out of their own pockets if they fail to realize the consideration from the clients. For example, if the service is already provided and the invoice has also been issued, service tax would have been paid on the same, at the time when the service is provided or at the time when the invoice is raised, whichever is earlier. But if the payment is not at all received subsequently, there is no provision to claim adjustment / refund of the service tax already paid.

Such service tax could not be covered under Rule 6(3) of the Service Tax Rules, 1994 as the service has been provided. It cannot be covered under Rules 6 (4A) / (4B), as it is not a case of any excess payment of service tax. The service has been provided and hence the taxable event has happened. As the point of taxation has also occurred, service tax has also been paid. So, it is immaterial, whether the payment is received or not.

Unlike goods, which can be taken back in the event of non-payment of the consideration thereof, services, being intangible in nature, cannot be reclaimed from the service receivers. Further, service providers do not have a lien on the service provided by them the way a seller has a lien on the goods sold by him. There are no documents of title to services which can be put through the bank to make the recoverability certain. The rights of an unpaid seller of goods [Sections 45 to 54 of Sales of Goods Act, 1930] are well guarded and recognized in law as against the rights of an unpaid service provider.

Issue The service provider has to deposit the service tax from his own pocket even though he is unable to recover the value of his taxable services and taxes thereon.

Suggestion Rule 6(3) of the Service Tax Rules, 1994 be suitably amended to allow excess payment of service tax in the event of bad debts with a view to mitigate the genuine financial hardships of the service provider as the assessee is required to deposit service tax from his own pocket even though he is unable to recover the value of his taxable services.

14. Excise Duty on RMC manufactured at Site Though the amendment vide Notification 12/2016-CE extends the exemption to RMC, it does not affect the effect of the Supreme Court decision prior to 01st March 2016, as

retrospective effect has not been given to Notification 12/2016-CE. The following position emerges in the present situation: Any proceeding initiated for period prior to 01-03-2016 would be governed by the SC decision and there may be no exemption to RMC; The department can initiate proceedings for the past years within the period of limitation; RMC is entitled to exemption from 01-03-2016. It is also pertinent to note that Notification No 12/2016-CE has not been provided with express retrospective effect nor can it be termed clarificatory due to the decision of the Supreme Court in the L&T's case. Suggestion The said exemption which was given on prospective basis needs to be restored on retrospective basis. 15. Definition of input - CENVAT credit on capital

structures Definition of “input” specifically excludes any goods used inter alia for laying of foundation or making of structures for support of capital goods, except for the provision of service portion in the execution of a works contract or construction service as listed under clause (b) of section 66E of the Finance Act, 1994. Companies setting up new factories are thus not permitted to avail CENVAT credit on cement, iron, steel, plates etc either as part of civil structure or supporting capital goods (machines etc). It results in increased cost of construction. This provision goes against the very spirit of CENVAT.

Suggestion It is suggested that definition of input be amended to provide CENVAT credit on capital structures etc

16. Definition of input service - Need overview to remove

anomalies. Rule 2(l) defines input service to mean any service: “(i)…. (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation.........................and inward transportation of inputs or capital goods and outward transportation upto the place of removal but excludes ............are used primarily for personal use or consumption of any employee. Suggestion With the introduction of the new service tax regime based on the concept of a negative list, service tax is leviable on the broad spectrum of all the services except those specified in the negative list. When the taxation of services has become universal, the credit for input services should also follow the same principle and be made available across the board. The

exclusions for rent a cab, canteen, setting up of business, Construction of factory building, outdoor catering for employees, employees insurance etc., should be done away with. It is suggested that definition of ‘input services’ be redrafted as “all services procured by assessee which is obtained and used wholly and exclusively for the purposes of the business of such provider of taxable services or manufacturer of excisable goods” including the Credit on Input Services used for capital structures. It is suggested that credit on all inputs, input services and capital goods except when they are used for personal or employee use be allowed to sizably bring down the litigations and promote ease of doing business. Further, it is suggested that cross utilization of Credit be allowed on all inputs, input services and capital goods without restriction on utilization of any type of duties and taxes which would help the assessees as the funds would not be blocked and there would be a reduction in transaction/ litigation costs. We hope that the points submitted by Builders’ Association of India will get due consideration. Thanking you,

Yours truly,

AVINASH M PATIL


Budget – 2017-18 ( An Overview) Indian Construction in February 2017 issue gave broad contours of budget. Indian Construction is now giving little depth in understanding of budget proposals. Revenue assumption showed 12% growth for 2017-18 against 17% during 2016-17. This under estimation is understandable in view of implementation of GST from 1st September 2017 as well as firming up of crude oil price in last six months in international market. Finance Minister has chosen to maintain fiscal deficit at 3.2% despite allocating 10.7% more capital expenditure on infra projects in 53% increase over 2016-17 at Rs. 23000/- crores under Pradhan Mantri Awas Yojna is first step in providing Housing for all. Indian Construction re-produces two articles namely “growth engine” end “Building Hopes” from Business Today 26th February 2017 issue. Growth Engine Building India

� Transportation, including rail, roads and shipping, has got Rs. 2,41,387 crore, up 10.2% from last year; in all, the infrastructure sector has got Rs.3,97,000 crore, 10.5% more than last year.

� The road sector has got Rs. 64,900 crore, 12.5% more

than last year. � Total capital and development expenditure of

railways pegged at Rs. 1,31,000 crore, 8.6% more than last year.

� Public sector enterprises, especially in the oil sector, to be merged, so that they can compete with global majors.

Great emphasis has been laid on infrastructure in the recent Budget, with allocations being increased by 10.5 per cent from the last financial year to Rs. 3.96 lakh crore. With gross domestic product (GDP) growth likely to drop this year, the hope is clearly that increased public spending on infrastructure will spur private investment as well.

There are, however, severe challenges. Three years ago, in May 2014, the road sector alone had run up a staggering Rs. 74,088 crore of debt, of which Rs. 9,875 crore was at serious risk of turning bad. Since then, Minister of Roads and Highways Nitin Gadkari has evolved a low risk hybrid model by which part of the financial risk of road building is borne by the concerned government organisation - such as the National Highway Authority of India - and only the remaining devolves on the private player. In September last year, Welspun Enterprises Ltd, which is building the Delhi-Meerut Expressway, became the first player to achieve financial closure under the new scheme. Gadkari's initiative has also revived the construction equipment market, which after contracting for three consecutive years, reversed the trend and grew two per cent in 2015/16. It is expected to do even better this fiscal.

The biggest project on Gadkari's plate is the ambitious Bharat Mala, which aims to build 6,000 km of highways along the border and coastal roads of North India. Yet another project aims to connect 123 district headquarters and remote tourism destinations such as Badrinath and Gangotri. In rural India, around 15 per cent of the total allocation for the rural sector has gone to the Prime Minister's Gram Sadak Yojna (PMGSY). Gadkari had sought an allocation of Rs. 97,000 crore in the current financial year. Though the Budget gives his ministry only Rs.64,900 crore, he has the option of raising more through tax free masala bonds.

The new roads are expected to give a big fillip to the cement and steel sectors, since most of them will use concrete rather than bitumen - which reduces both construction cost and fuel consumption. Around 1,000 tonne of cement is required to build a one km long two lane highway, apart from steel, fly ash, sand and water, so the multiplier effect can be imagined.

Track Changes With the railway budget included in the general budget for the first time, the Ministry of Railways' capital expenditure has been pegged at Rs. 1.31 lakh crore, of which Rs. 55,000 crore has been allocated in the Budget proposals - eight per cent more than in the last financial year - while the rest will have to be raised by the Railways. Railway Minister Suresh Prabhu had already initiated a number of reforms and the generous

funding will enable him to push them further. The Budget also includes a provision to create a safety fund with a corpus of Rs 1 lakh crore over the next five years. With a decision having been taken to buy the best of global equipment to guarantee safety, the likes of GE, Siemens, Toshiba, Hitachi, Alstom, Kawasaki and Mitsubishi are likely to be queuing up to offer their wares. However, it is not the quantity of funding, but that of spending the funds allocated that is a challenge for the ministry. Until December 31 last year, only around Rs. 70,000 had been utilised against the annual allocation of Rs. 1.21 lakh crore, mainly due to a sluggish economy and expenditure inefficiencies. Among his reforms, Prabhu is keen to introduce accrual-based accounting, create a regulator for the Railways to periodically revise tariffs and set up a new holding company, Rail Holdco, which will govern all the 13 public sector units under the ministry. Three of these 13 - CONCOR, IRCTC and IRCON - are also likely to be listed on the bourses this year. Along with Urban Development Minister M. Venkaiah Naidu, Prabhu is also finalising a new policy for metro rail networks across the country, standardising requirements and processes. Prospective investors are delighted. "If there is clarity on order size, it will help us to put together our financial plans effectively," says Mangal Dev, Director and Head of Hitachi's Railway Systems Business Unit for India and the South Asian Region. The expansion of railway capacity to manufacture locomotives and coaches will be yet another spur for the steel industry.

Power and Oil The Budget has also suggested the merger of state-owned oil companies to create behemoths with greater risk management capacity and more clout in international markets. The merger could not be more opportune at a time when India's oil demand is rising a robust 8.8 per cent annually. Domestic private players like Reliance Industries Ltd. have begun expanding their oil retailing operations. Global players such as Rosneft and Trafigura - which took over Essar Oil last October as part of a consortium - as well as BP and Saudi Aramco, have also been given the go ahead to do the same. In the power sector, private industry can take comfort from the fact that fears of the coal cess being enhanced further in the Budget have been belied, perhaps because both coal production and electricity demand have been showing a downward trend. This is mainly due to the poor financial health of the state owned discoms, but there is hope that with more than half the states having joined the Ujjwal Discom Assurance Yojna (UDAY) by which the states underwrite their discoms' debts, revival is round the corner. A host of independent power producers (IPPS) are waiting anxiously for the discoms to start buying more power. The Budget also provides 25 per cent additional allocation for the Deen Dayal Upadhyay Gram Jyoti Yojna, which too is an opportunity for IPPS. Renewable energy is also poised to grow, with the Budget supporting the second phase of building solar parks, which will house capacity of another 20 GW.

Budget 2017 – Housing Building Hopes Housing for All by 2022” has been a refrain of the Modi government. Small wonder, then, that the government announced a number of initiatives to boost the real estate sector. Finance Minister Arun Jaitley has given “infrastructure status” to affordable housing, a long standing demand of developers and will translate into cheaper loans for them. Industry players, who have been taking credit at a steep 13-16 per cent, term the change significant as it will substantially cut their cost of funds for the vital budget housing segment with re-financing options by the National Housing Bank. Rajeev Talwar, CEO of DLF Limited, India’s largest realty company, says that the ‘infrastructure status’ will give them access to capital at far lower interest rates. “Other incentives like change in measurement methodology from built up area to carpet area and extension of affordable housing scheme completion to five years from three years will enhance demand,” says Talwar. Similarly, Purvankara Projects and Shapoorji Pallonji said they will launch new affordable housing schemes. Norms under affordable housing have been changed to carpet area – and not built-up – of 30 square metres (sqm) in the four metropolitan cities and 60 sqm in other cities. Besides attracting more builders, the buyers will benefit from more spacious homes. “The relaxation in measurement will give an additional 25- 30 per cent area to such houses in urban settlements, which is a great value proposition to propel demand. It will encourage home buyers and further boost participation from the private players,” says Anshuman Magazine, Chairman, India and South East Asia, CBRE, a multinational consultancy. Hit hard by demonetisation, the real estate sector also gets a push from a higher Budget outlay of Rs. 23,000 crore under the Pradhan Mantri Awas Yojna, a 53 per cent increase over the previous year. After the 3-4 per cent interest subvention announced by the Prime Minister for low cost housing on December 31, the government is targeting one crore houses in rural India by 2019. Real estate sector has huge inventories, especially in housing, driven by years of low demand. In the largest Delhi- NCR market alone, there is an inventory overhang of over 2,50,000 unsold flats, denting developer sentiments. A big relief to developers will come from the budgetary proposal of allowing the notional rental on unsold stock to be assessed only after one year of completion, which will bring down their inventory and push sales. Meanwhile, the government plans to give a big push to infrastructure which could be good news for the real estate sector as well. A whopping Rs. 3,96,135 crore has been allocated for infra projects in the 2017/18 Budget. Now, the correlation between a boost to infrastructure and real estate growth is a well established fact and the government has already made public its intention to provide houses to all in the next five years.

While allocation of Rs. 1000 crore for a new Credit Linked Subsidy Scheme for middle income groups will also revive demand, there are more incentives in the Budget for the real estate sector. The duration of holding to avail long term capital gains benefits is being reduced to two years from the existing three years. It will lead to faster sales in the secondary market and increase tax compliance amongst the real estate stakeholders. Also, the base year for indexation is proposed to be shifted from 1.4.1981 to 1.4.2001 for all classes of assets including immovable property. “The shift to the base year for indexation will help reduce capital gains liability on the customers. It will encourage faster mobility of assets as the tax liability on capital gain will come down substantially,” says J. C. Sharma, Vice-Chairman & MD of Bengaluru-based Sobha Limited. The fresh proposals in the Budget are likely to encourage leading real estate players to turn their attention to affordable housing. “This Budget has brought us a step closer in achieving the mission of providing housing for all. Implementation of these schemes will be essential for its success. Clarity on the definition of ‘affordable housing’ will be useful and beneficial for players like Tata Housing as a pan-India developer, which is currently developing more than 40 million square feet of affordable housing,” says Brotin Banerjee, MD & CEO, Tata Housing. The government has also proposed changes in the taxation of Joint Development Agreement to allow more land owners to partner with developers for lowering project costs. Besides, the renewed focus on new and existing roads as well as expanding coastal connectivity will also boost the real estate sector. Also, abolishing the Foreign Investment Promotion Board will make it easier to get foreign funding through the automatic route. What's more, a boost to real estate can also boost cement, steel and construction industries, spurring growth along with employment.

Budget 2017-18 – At Glance (Figures are in Rs. crore)

Sr. No.

Budget Head Revised estimate 2016-17

Budget estimate 2017-18

Remarks

1. Net Tax Revenue of centre

1088792 1227014 Gross tax revenue to grow at 12.2% against 17% in 2016-17. Other receipt represents disinvestment of public sector undertakings. Net tax revenue increase at 11.25%. Borrowing is marginally increased shows fiscal prudence.

2. Non-Tax Revenue 334770 288757

3. Recoveries of loans

11071 11932

4. Other receipts 45500 72500

5. Borrowings and other liabilities

534274 546532

Total Receipt 2014407 2146735

6. Revenue Expenditure on Scheme

631511 674057 Railways allotted Rs. 136000/- crores for capital expenditure in 2017-18, against Rs. 121000/- crores in 2016-17. It will raise Rs. 18000/- crores as

7. Revenue Expenditure other than schemes

1103049 1162877

8. Capital A/c 238336 271021

Expenditure on scheme

loan from LIC and Rs. 22000/- crores from Bonds N.H.A.I. allotted Rs. 64900/- crores in 2017-18 against Rs. 52447/- crores in 2016-17. N.H.A.I. will raise Rs. 59300/- crores through bonds Prime Minister Gram Sadak Yojna allotted Rs. 27000/- crores in 2017-18, same as was in 2016-17.

9. Capital A/c Expenditure other than scheme

41511 38780

Total Expenditure

2014407 2146735

10. Revenue Deficit 310998 321163

11. Revenue deficit as percentage of G.D.P.

2.1 1.9

12. Fiscal deficit as percentage of G.D.P.

3.5 3.1

BAI has signed a Memorandum of Understanding (MoU)

between Builders’ Association of India (BAI) represented by

Shri Avinash M. Patil, President, BAI and Indian Green

Building Council (IGBC) represented by Dr. Prem C. Jain,

Chairman, IGBC, in presence of Shri Tathagata, Governor

of Tripura. IGBC is a wing of Confederation of Indian

Industry (CII) which is reproduced below

Memorandum of Understanding Between

CII’s Indian Green Building Council (IGBC) And

Builders’ Association of India (BAI) For

A Partnership 1. About Confederation of Indian Industry (CII)

The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the development of India, partnering industry, Government, and civil society, through advisory and consultative processes. CII is a non-government, not-for-profit, industry-led and industry-managed organization, playing a proactive role in India's development process. Founded in 1895, India's premier business association has over 8000 members, from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 200,000 enterprises from around 240 national and regional sectoral industry bodies. CII charts change by working closely with Government on policy issues, interfacing with thought leaders, and enhancing efficiency, competitiveness and business opportunities for industry through a range of specialized services and strategic global linkages. It also provides a platform for consensus building and networking on key issues. With 66 offices, including 9 Centres of Excellence, in India, and 9 overseas offices in Australia, Bahrain, China, Egypt, France, Germany, Singapore, UK, and USA, as well as

institutional partnerships with 320 counterpart organizations in 106 countries, CII serves as a reference point for Indian industry and the international business community.

2. About Indian Green Building Council (IGBC) The Indian Green Building Council (IGBC), part of CII was formed in the year 2001 and since then, with the support of the stakeholders is playing a catalytic role in spearheading the Green building movement in the Country. IGBC is a consensus based, not-for-profit organization, representing stakeholders of building industry comprising of- Government, architects, designers, consultants, corporate, nodal agencies, institutions, builders & developers, product manufacturers, suppliers, facility managers, etc.,

The vision of the Council is ‘To enable a sustainable built

environment for all and facilitate India to be one of the global

leaders in sustainable built environment by 2025’.

As on January 2017, IGBC has facilitated over 4.48 billion sq.ft of green building footprint go the green way. This in turn has enabled India become the 2ns country in the world in terms of largest green building footprint. IGBC has launched 18 Green building rating systems to suit various building types. IGBC Green Building Rating Systems are based on the five elements of the nature (Panchabhutas) and are designed to address National priorities. Over 3,900 projects are adopting IGBC Green Building Rating Standards. IGBC aspires to facilitate 10 billion sq.ft of green building footprint by 2022 (75th year of Independent India). 3. About Builders’ Association of India (BAI). Builders’ Association of India (BAI) is an apex all India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 16,000 business entities as members through its 158 plus Centres (Branches) throughout the country. Regional Associations Affiliated to BAI form indirect membership of more than 1,00,000. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as policy level problems faced by the construction industry. This involves making efforts to obtain from policy makers and authorities, the level of attention that the construction industry deserves in view of its tremendous contribution and importance to the economy. Vision:

• To interact with Government bodies like State Public Works Departments and the Central Public Works Department to modernize methods and specifications of works towards ensuring suitable work ethics in the Industry and standardizing tender procedures. Contracts awarded on the basis of such standardization will ensure uniformity in execution of construction jobs.

• To achieve highest standards of efficiency and quality by

adopting methodology which could be derived from both Indian and International Standards with a view to making the construction sector competitive in domestic as well as international markets.

• To develop linkages with other industry and Trade Associations, Chambers of Commerce, Federations etc. to enhance the value of its services to members. It shall network with international bodies and gain global presence for its members.

• To regard workers and technicians as the key resource for construction industry. It shall support and establish training institutions to train workers and technicians.

The major objectives of BAI are as:

a) To promote and foster feelings of unity, co-operation and

mutual help and to eliminate unhealthy competition and unfair trade practices among the contractors.

b) To encourage the trade, industry and profession of construction works and all other ancillary and allied trades and industries.

c) To advise and assist the members in technical, non-technical and legal matters.

d) To encourage and conduct research for progress in building and construction trade and industry and any other profession connected therewith and for that purpose to establish, construct, promote, form and maintain testing institutions, laboratories, buildings, test houses, libraries, collection of models, designs, drawings, articles of interest and such other information.

e) To improve and elevate the technical and general knowledge of persons engaged in or about to be engaged in the building trade or in any employment in connection therewith by arranging lectures, conducting classes, exhibitions, meetings, seminars, etc. and to award certificates of distinction and medals, trophies and prizes and also institute and establish or to help in establishing funds for scholarships, rewards and other benefactions.

4. Areas of Cooperation. The Indian Green Building Council (IGBC) and the Builders’ Association of India (BAI), the two institutions (also referred to as the Parties) agree as follows:-

1. Networking in events: Based on the theme of the meeting or event, IGBC and BAI shall participate to advance green buildings, especially residential, in Indian construction industry. IGBC and BAI shall offer complimentary participation of respective key officials in their annual events, seminars and conferences for mutual benefits.

2. Capacity Building: IGBC and BAI shall jointly

organize training and awareness programmes to facilitate capacity building to the stakeholders of IGBC and BAI chapters across the country. This

would facilitate BAI members’ projects going green with IGBC and further enhance the benefits.

3. Reach out and Information Sharing: IGBC and

BAI shall share non-confidential information with regard to green buildings, sustainable construction techniques, green materials etc. to reach out to members of BAI and IGBC.

4. Marketing: IGBC and BAI shall promote where

appropriate, each other’s services and events. Each organisation shall help publicise the others’ events in their respective websites, printed publications, etc. Complimentary stalls shall be provided in each others’ events.

5. IGBC local chapers: IGBC would seek the support

of BAI members in all its local chapters and work closely with the stakeholders in the Region/State in taking forward the green building movement. Senior office bearers of BAI would also be invited to the Executive Board meetings of IGBC.

6. IGBC Technical Committees: Senior members of

BAI would be invited to become members of various technical committees and steering committees of IGBC green building rating system.

5. Terms and Conditions. There shall be no financial commitment of any kind between both parties. 6. Agreement Tenure. This memorandum of understanding (MoU) is valid for a period of three (3) consecutive years from the date of signing of this MoU by both parties and thereafter, shall be renewed for a further period of 3 years on mutually agreed terms and conditions.

AVINASH M. PATIL President

Builders’ Association of India

Dr. PREM C JAIN Chairman

Indian Green Building Council

Date: 4th March 2017 Place: Kolkata

Excise Duty Matter

Excise Duty on 'Site Manufacturing' Many infrastructure players executing metro-mono rail

projects or flyovers require manufacturing for their respective

projects, specific beams, girders, etc. at their respective

project site, which were exempt from Excise Duty. However,

some of Excise Department’s, field officers were denying

exemption on the basis that the manufacturing site / yard is

away from the project site. BAI represented the matter to

Central Board of Excise & Custom, (CBEC) stating that in

crowded cities, client/owners offer to the contractors,

manufacturing yards at a distance from actual project site, as

such exemption should be granted even in such cases CBEC

accordingly issued circular expanding scope of word 'site',

which is reproduced below.

Circular No.1036124/2016-CX F. No. 68/1/2016- CXI Government of India Ministry of Finance

Department of Revenue Central Board of Excise and Customs

New Delhi, dated the 6th July, 2016

To, Principal Chief Commissioners of Central Excise/Service Tax (All), Chief Commissioners of Central Excise/ Service Tax (All), Principal Commissioners of Central Excisel Service Tax (All). Madam/Sir,

Subject:- Scope of word 'site' appearing in Notification No.

1212012- Central Excise, dated 17.03.2012-reg Representations have been received from the trade regarding difficulties being faced in availing of benefit of exemption applicable to goods manufactured at the site of construction for use in construction work at such site vide S.No. 186 of Notification No. IU20I2-Central Excise, dated 17.03.2012, as amended. The issue is, how should the expmsion "site" used and defined in the aforesaid notifcation be interpreted, particularly for projects which run long diitances, such as construction of road, laying of pipelines or laying of railway tracks etc. 2.1 The issue has been examined in the Board. The

expression site has been defined in the notification (ibid) as "any premises made available for the manufacture of goods by way of a specific mention in the contract or agreement for such construction work, provided that the goods manufactured at such premises are solely used in the said construction work only".

2.2 It is clear from the definition that the expression "site"

cannot be given a restrictive meaning while interpreting the same so long as the premises under consideration for availing benefit of exemption under S. No. 186 of Notification No. 12/2012-Central Excise, dated 17.03.2012 fulfils following conditions:-

i. The said premises are made available to the

manufacturer of goods by way of a specific mention in the contract/agreement for such construction work.

ii. The goods under Chapter 68 (except 6804, 6805,

6811, 6812 and 6813), for which exemption is claimed are manufactured at the said premises; and

iii. Such goods manufactured at the said premises are exclusively used for the construction work, as per the relevant contract or agreement.

3. It appears that in some field formations, the distance at

which goods manufactured at site is used in the project, has been considered as criteria for examining the eligibility of goods for exemption. This is an extraneous criteria not flowing from the language used in the notification, particularly when the expression “site” stands explained in the notification. As explained in para 2.2 above, the eligibility criteria must flow from the plain reading of the explanation of the expression “site” in the notification.

4. In view of the above, it is hereby directed that each case

may be decided taking into consideration the facts of the individual case, examined in light of the clarification given above. Circular No. 456/22/99-CX, dated 18.05.1999 is hereby rescinded.

5. Field formations and trade may be suitably informed.

Difficulty experienced, if any, in implementing the cirular should be brought to the notice of the Board. Hindi version would follow.

(Santosh Kumar Mishra)

Under Secretary to the Government of India

NITI Aayog’s initiatives on revival of the construction Sector. Infrastructure companies successfully completed certain highway projects. In the course of execution differences and dispute arose with National Highway Authority, which ultimately led to arbitration. Out of Rs. 70,000 crores, awards worth Rs. 20,000 crores given in favour of contractors were challenged by NHAI in High Courts, pending disposal. These companies had availed bank loans, which they could not repay in time due to claims being locked up. As a result, construction companies’ interest burden went on increasing affecting their performance in current fiscal year. Banks have either restructured their loan or in some cases declared it a non-performing asset. Construction companies’ balance sheets were stressed. In the given circumstances, President of Construction Federation of India, Mr. Ajit Gulabchand met Union Finance Minister Shri Arun Jaitely on 9th June 2016 and gave representation urging him to take steps for easing financial stress on banking and construction industry. Ultimately it resulted in a meeting held in Prime Minister’s Office in the first week of August 2016, attended by Secretaries of Expenditure, Surface Transport, Law, Corporate Affairs, Chairman-National Highways Authority of India (NHAI) and representative from Niti Ayog. This meeting sorted out the issue, under which 75% amount of arbitration award given in favour of contactors shall be released in favour of Banks against Bank Guarantee. If NHAI is successful in the Court, then Bank Guarantee shall be cashed by NHAI. Alternatively

if Court order is in favour of contractor, Bank Guarantee would be released. In addition, Niti Ayog also examined issues leading to arbitration award and delay in finalization of awards. Niti Ayog recommended that, arbitration cases initiated under the pre-amended Arbitration Act be transferred to the amended Arbitration with consent of contractors wherever it is possible and item rate contract may be substituted by model EPC (Turnkey) contract. All the recommendations of Niti Ayog were forwarded to Cabinet Committee on Economic Affair (CCEA) for its recommendation. CCEA under Chairmanship of Prime Minister examined the recommendation of Niti Ayog and granted approval in its meeting held on 31st August 2016. This decision would help many infrastructure developers to save on interest expenses and reduces their bank debt. This is expected to help in improving the liquidity in short run and reform the construction sector in long run. All new contracts shall have a provision of conciliation board of independent subject experts. Government Departments and PSUs have also been instructed to transfer cases under arbitration to the amended Arbitration Act which has an expedited procedure, with the consent of the contractors. In the long run, other measures are also under consideration, including changes to bid documents and model contracts, and increased use of conciliation. NITI Ayog will also examine the idea of creating "claim take out funds" financed by private sector investors, while the Department of Financial Services will examine a suitable scheme for addressing stressed bank loans in the construction sector.

Press Information Bureau Government of India

Cabinet Committee on Economic Affairs (CCEA)

31-August-2016 14:11 IST

Cabinet approves Initiatives to revive the Construction Sector

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi today approved various measures to revive the construction sector which has been undergoing stress. Under the proposal put forward by NITI Aayog and approved by the CCEA. Government agencies would pay 75% of the arbitral award amount to an escrow account against margin free bank guarantee, in those cases where the award is challenged. The escrow account can be used to repay bank loans or to meet commitments in ongoing projects. This is a major step which will allow recovery of loans by banks and allow construction companies to speed up execution of ongoing projects. It will also increase the ability of construction

companies to bid for new contracts and the resulting competition will be beneficial in containing the costs of public works. This measure will provide a stimulus to the construction industry and to employment. Government Departments and PSUs have also been instructed to transfer cases under arbitration to the amended Arbitration Act which has an expedited procedure, with the consent of the contractors. In the long run, other measures are also under consideration, including changes to bid documents and model contracts, and increased use of conciliation. NITI will also examine the idea of creating "claim take out funds" financed by private sector investors, while the Department of Financial Services will examine a suitable scheme for addressing stressed bank loans in the construction sector.

Background The move comes in the backdrop of the need to have a slew of short-term and long-term initiatives to address the issues ailing the construction sector. The construction sector is a major contributor to economic activity accounting for about 8% of GDP. It is the largest creator of direct and indirect employment, employing about 40 million people. It is a highly employment intensive sector with a strong multiplier effect, creating an estimated 2.7 new jobs indirectly for every Rs. 1 lakh invested. It has major forward linkages to sectors like real estate, infrastructure and manufacturing and backward linkages to steel, cement, etc. Thus, this sector is critical for stimulating employment and economic activity. In recent years, the construction sector has been affected by the large number of projects which got stalled during the period of stagnation between 2011 and 2014. The banking sector also has a large exposure to construction, estimated at over Rs. 3 lakh crores. 45% of the bank loans in the sector are under stress. Studies have shown that a key factor behind the difficulties facing the construction sector is the pendency of claims from Government bodies. An estimated Rs. 70,000 crores is tied up in arbitration. Over 85% of the claims raised against Government bodies are still pending of which 11% is pending with the Government agencies, 64% with arbitrators and 8.5% with courts. The average settlement time for claims is estimated at more than seven years. A majority of arbitration awards have gone against the Government agencies. In the case of the National Highways Authority, out of a total of 347 arbitral awards, 38 went in favour of the authority and 309 went in favour of the contractor/concessionaire. Out of the arbitral awards in NHAI cases, more than 90% were unanimous awards in which all arbitrators including the one appointed by NHAI had concurred in the decision. In many cases, arbitration awards are contested in the courts, even though a large majority of arbitration decisions are upheld by the courts. However, of late, the construction sector has been several challenges leading to decline in the overall investments and growth. The issues ailing the sector was discussed with the representatives of construction companies, banks, NHAI, concerned Departments/ Ministries. Based on detailed

discussions, larger economic importance and multi-sectoral nature of the issues, NITI Aayog put forward the proposal to suggest various initiatives required for addressing the issues ailing the construction industry.

*****

Press Information Bureau Government of India

Cabinet Committee on Economic Affairs (CCEA)

31-August-2016 14:17 IST

Backgrounder: Initiatives to revive the Construction Sector

The Cabinet Committee on Economic Affairs under the Chairmanship of Prime Minister Shri Narendra Modi has approved today a series of initiatives to revive the Construction Sector.

These initiatives include:

(i) PSUs/Departments may seek the consent of the contractors/ concessionaires to transfer the arbitration cases initiated under the pre-amended Arbitration Act to the amended Arbitration Act, wherever possible;

(ii) In case of claims where the PSU/ Department has challenged the Arbitral Award, 75% of the award amount may be paid by the PSU to the contractor/ concessionaire against margin free Bank Guarantee;

(iii) All PSUs/ Departments issuing public contracts may consider setting up Conciliation Committees/ Councils comprising of independent subject experts in order to ensure speedy disposal of pending or new cases;

(iv) Item-rate contracts, may be substituted by EPC (turnkey) contracts, and PSUs/ Departments may adopt the Model EPC contracts for construction works; and

(v) Department of Financial Services, in consultation with Reserve Bank of India, may evolve a suitable one-time scheme for addressing stressed bank loans in the construction sector.

Major Impact These initiatives are expected to help in improving the liquidity in the short run and reform the contracting regime in the long run. Given the significant multiplier effect the construction sector has on the economy, these measures are expected to give a major boost to economic growth. As the sector provides the largest segment of direct and indirect employment, the revival of the sector would also help in significant employment generation.

Overview: Construction sector has an important place in the Indian economy. It is the second largest contributor to economic activity accounting for about 8% of GDP; accounts for the second highest inflow of FDI after the services sector; generates the highest level of direct and indirect jobs employing about 40 million people and creating 2.7 new jobs

indirectly for every Rs. 1.00 lakh invested. The sector has major forward (infrastructure, real estate, manufacturing) and backward (steel, cement, etc.) linkages, implying a high multiplier effect on economic growth, almost two times. Major construction activity originates in the infrastructure, industrial and real estate sectors, where infrastructure sector accounts for almost half of the demand.

The demand for construction services is expected to rise due to several factors, like massive expansion of the infrastructure sector, industrialization, urbanization, rise in disposable incomes, various Government initiatives to improve India's residential and transport infrastructure (Smart Cities project, 'Housing for All by 2022', Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and easing of FDI norms in 15 sectors including real estate and construction). Timetric's Construction Intelligence Centre (CIC) projects major growth for the construction industry in India, with average annual growth in real terms expected to improve from of 2.95% in 2011-2015 to 5.65% during 2016-2020.

However, of late, the construction sector has been showing signs of stress. Revenue growth and profit before tax (PBT) margins have declined significantly. Most companies are barely able to cover interest costs from earnings. Increasing debt levels remain a critical issue affecting financial stability and borrowings. Several factors have contributed to this stress e.g. in stalled assets in infrastructure sector and high levels of receivables especially from the government entities, slowdown in real estate sector leading to stretched liquidity and limited resources.

A report commissioned by the Cll indicates that: (i) Pending claims from government bodies are key factor behind burgeoning debt of construction companies, accounting for -150% of the debt; (ii) Over 85% claims raised are still pending of which 11% are at the level of employers, 64% at arbitrators and 8,5% in Courts; (iii) Average settlement time is 7.5 years; (iv) "Awarded claims" do not get settled after the Arbitrator's decision; (v) Almost all court orders uphold the arbitrators' decisions and referring claims to courts leads to delayed pay-out by about 2.5 years; and (v) Only about 8% of total claimed amount (among settled claims) was agreed for and paid out by NHAI in FY15.

Subsequent to the discussions with various stakeholders including the representatives of construction companies, banks, NHAI, concerned Departments/Ministries and PSUs, following issues emerged:

a) Substantial claims raised by contractors/ concessionaires against PSUs are pending either in the arbitration proceedings or in courts;

b) Most of the pending claims are legacy issues relating to old item-rate contracts. With phase out of item-rate contracts and adoption of EPC (turnkey) contracts in NHAI, the number and quantum of claims is likely to come down;

c) Settlement of claims through conciliation proceedings by committees of experts has proved to be much more effective than arbitration and the

settlement is reached at a much lower value than the claimed amount in conciliation proceedings;

d) Delays in final settlement of disputed claims implies significant interest payments by the PSUs by way of delayed payment charges;

e) The amended Arbitration Act addresses some of the lacuna of the original Act; and

f) Mounting claims in public contracts indicate deficiencies in the contracting regime thus warranting reform.

Based on detailed discussions, it was decided that NITI Aayog would move a proposal to the CCEA suggesting various initiatives required for addressing the issues ailing the construction industry in view of the larger economic importance and multi-sectoral nature of the issues. Accordingly, after detailed stakeholder consultations, a series of initiatives is being put in place to address the issues impacting the construction sector.

***

No. N-14070/14/2016-PPPAU Government of India

National Institution for Transforming India (NITI Aayog)

NITI Bhawan, New Delhi September 05, 2016

Office Memorandum

Subject: Initiatives on the Measures for revival of the Construction Sector – regarding.

1. The construction sector has been facing a number of problems, mainly arising from the liquidity constraints caused on account of their payments not being released by the Government Departments / Public Sector Undertakings (PSUs) pursuant to the arbitral awards. To discuss the problems of the construction sector, detailed deliberations / consultations were held with the representatives of the construction industry, banks, major government PSUs and concerned Ministries / Departments. Based on the above deliberations / consultations, the NITI Aayog placed a proposal before the cabinet Committee on Economic Affairs (CCEA) for its consideration suggesting various immediate and long-term measurers required for addressing the issues ailing the construction sector. The CCEA, chaired by the Hon’ble Prime Minister, has considered the proposals of NITI Aayog in its meeting held on 31st August 2016 and approved the same for the revival of construction sector.

2. The NITI Aayog has separately issued instructions on the subject with regard to the immediate measures to be taken by all concerned. In addition to the said instructions, the CCEA has also directed that the following measures may be expeditiously examined by all the concerned Departments / Ministries / PSUs: 2.1 Item-rate contracts, may be substituted by EPC

(turnkey) contracts, wherever appropriate. Such contracts have been in vogue for over two

decades in the developed world and Federation International Des Ingenieurs-Conseils (FIDIC – an International Federation of Consulting Engineers, Known by its French acronym) has also published such contractual frameworks;

2.2 Model bidding documents and Model EPC contracts, suitably revisited or modified wherever required to suit the requirements of particular sectors, may be adopted by PSUs / Government Departments for construction works;

2.3 Ministry of Finance has issued model bidding documents for RFQ, RFP etc. which may be adopted (with appropriate changes wherever required) in all sectors. Model EPC contracts have been developed for Highways and Railways and published by the erstwhile Planning Commission also. NHAI has already adopted this document and all construction contracts are currently being structured on this model. NITI Aayog shall assist the concerned departments, wherever required, in this regard.

2.4 The method of conciliation has proved more effective in settling disputes as per experience of some of the PSUs. All PSUs / Departments issuing public contracts ma consider setting up Conciliation Committees / Councils comprising of independent subject experts in order to ensure speedy disposal of pending or new cases. Recourse to such conciliation may be open before, during or after the Arbitration proceedings. A provision to this effect would also need to be made in the Contract Agreements in future as a mechanism for resolution of disputes.

3. All the concerned Ministries / Departments shall also communicate the above to their respective PSUs for taking necessary action on the aforesaid measures.

Sd/- (A. Muthuvezhappan)

Director (PPPAU) To:

1. Secretaries of all the Ministries / Departments of Government of India.

2. Chairpersons / CMDs / MDs of all the Central Government PSUs.

3. Chairpersons / CMDs / MDs / CEOs of all the Scheduled Commercial Banks.

4. Chief Executive, Indian Banks Association, Mumbai. 5. Shri Alok Tandon, Additional Secretary, Cabinet

Secretariat, Rashtrapati Bhavan, New Delhi – 110 001.

6. Dr. T.V. Somanathan, Joint Secretary, PMO, South Block, New Delhi – 110 001.

Copy for information to: 1. PS to Vice Chairman / PS to MoS / PS to all

Members

2. Sr. PPS to CEO / PPS to Special Secretary

Ref: 277/S/2016-17 dated September 7, 2016 Shri Narendra Modiji Hon’ble Prime Minister of India Government of India Prime Minister’s Office, South Block, NEW DELHI – 110 001

Respected Sir, Sub: Initiative to revive the Construction Sector.

Builders’ Association of India (BAI) is an apex all India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 16,000 business entities as members through its 158 plus Centres (Branches) throughout the country. Regional Associations Affiliated to BAI form indirect membership of more than 1,00,000. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as policy level problems faced by the construction industry. This involves making efforts to obtain from policy makers and authorities, the level of attention that the construction industry deserves in view of its tremendous contribution and importance to the economy.

Construction Sector has an important place in the Indian economy. It is the second largest contributor to economic activity accounting for about 8% of GDP; accounts for the second highest inflow of FDI after the services sector; generates the highest level of direct and indirect jobs employing about 40 million people and creating 2.7 new jobs indirectly for every Rs.1.00 lakh invested. The sector has major forward (infrastructure, real estate, manufacturing) and backward (steel, cement, etc.) linkages, implying a high multiplier effect on economic growth, almost two times. Major construction activity originates in the infrastructure, industrial and real estate sectors, where infrastructure sector accounts for almost half of the demand.

Sir, in such circumstances BAI gratefully acknowledge your initiative in reviving the Construction Sector by releasing 75% amount of arbitration award in favour of contractors against Bank Guarantee to the contractors. Sir, this initiative of yours will not only reduced bank loans to Construction Sector turned into non-performing asset (N.P.A.), but construction contractor’s balance sheet henceforth looks more healthy and reduction in interest outgo.

Since release of fund will now improve liquidity of construction contractors, they would positively respond to PPP projects of road-sea-air connectivity projects.

We once again thank you for your kind support to the Construction Industry and expected to avail similar measures in future too.

Yours faithfully,

AVINASH M. PATIL


22.11.2016. To The Director General CPWD, Nirman Bhawan New Delhi-110011. Sub: Measures to revive the Construction Sector - reg.

Ref: Your D.O. No. 02/SE (TAS) /Arb Cases/2016-17/280 E dated 18.11.2016. (Available on website)

Dear Sir,

We have perused the contents of your letter under reference (available at website) about the Cabinet Committee on Economic Affairs’ approval for revival of construction sector. We offer our views/comments on various decisions/directions, as follows:

1. Decision. To seek consent of contractors to transfer the pending arbitration cases under the Amended Arbitration Act. Our View: We agree with this decision.

2. Decision. Where the department has challenged the arbitral award, under Section 34 of Arbitration Act 1996, 75% of award may be paid by the department against Bank Guarantee without prejudice to the final order of the Court. Our View: We agree with this decision.

3. Decision. The payment may be made into designated ESCROW account with the stipulation that the amount so released will be used first for payment of lenders’ dues, second, for completion of the project and then for completion of other projects of the department as mutually agreed and decided. Any balance remaining in the ESCROW account subsequent to settlement of lenders’ dues and completion of the projects of the department may be allowed to use by the contractor with the prior approval of the department. Our View: We find that the provisions of this

para defeats the very purpose of ‘Measures to revive the construction sector’ as follows: It may create further disputes between contractors and department, as follows:

First: We consider that this condition is not

relevant to the works in CPWD. This condition may be application to other departments/PSUs which have lent their money to contractors and are suffering from non performing assets (NPA). In CPWD, it is not possible for the department to identity/decide the lenders of contractors.

Second: Operating/control over ESCROW account whether by department or contractor or by both.

Third: Control and monitoring of expenditure

if being incurred on this project or other projects of the department.

Fourth: The contractor is the best judge to

financially plan and decide to use the available funds for various projects in his hand keeping in view their priorities. The department’s interference in this matter will disturb the financial planning of the contractors.

Fifth: It will delay availability of funds in the

hands of the contractor, free from others’ control without which the very purpose of revival of construction sector, cannot be achieved.

Sixth: We understand that applying any

precondition for payment of the amount of the award by Arbitrator, may not be legally allowed.

4. In view of the above facts, it is considered necessary

that 75% of the award amount is released to the contractor immediately on his application with Bank Guarantee without any preconditions for which necessary approval of the competent authority may be obtained, if desired.

Yours faithfully,

R. N. Gupta Vice President

Achievement


To:

All Managing Committee / General Council Members of BAI Chairmen of all BAI Centres. Respected Sirs,

Sub: Office Memorandum issued by the Secretary - UD, Ministry of Urban Development, New Delhi dated 4.11.2016 and 07.11.2016.

Please recall the discussion held during the Managing

Committee meeting held at Chennai on Sunday, 6th November 2016 on ‘Ways and means of requesting State Government to replicate decision(s) of Cabinet Committee of Economic

Affairs in the Central Government, that of releasing 75% amount of Arbitration Award given in favour of contractors’,

In this regard, please find attached two Office Memorandum issued by CPWD, New Delhi, dated 04.11.2016 and 07.11.2016 issued by the Secretary - UD, Ministry of Urban Development, New Delhi after the revival of the matter of Arbitration amount to be paid to the Contractors against bank guarantee.

This memorandum will help many infrastructure developers to save on interest expenses and reduces their bank debt. This is expected to help in improving the liquidity in short run and reform the construction sector in long run. All new contracts shall have a provision of conciliation board of independent subject experts.

This is for kind information and record.

Please send us email on [email protected] for any further information/clarification you may be required in this regard.


RAJU JOHN

Executive Secretary Builders’ Association of India

Demonetisation – Impact on Construction / Real Estate & BAI’s response Prime Minister on 8th November 2016, announced the demonetisation of Rs. 500/- and Rs. 1000/- currency note, effective from midnight, to unearth black money, eliminate terror funding and fake currency. India is a case based society. Seventy percent of transactions are in cash. Fourty Eight percent of G.D.P. comes from informal sector, which accounts for eighty percent of our population. Country has the highest currency in circulation at Rs. 17.50 lakh crores, which is 13% of GDP against 4% in advanced economies. Out of total currencies in circulation, 86% is in denomination of Rs. 500/- and Rs. 1000/- notes, amounting to Rs. 15.35 lakh crores. Details of notes in circulation is given in Table A :-

Table A Sr. No.

Denomination of currency

Number of notes in

circulation in million

pieces

Sr. No.

Denomination of currency

Number of notes in

circulation in million

pieces 1. Rs. 5/- 7000 5. Rs. 100/- 15000

2. Rs. 10/- 32500 6. Rs. 500/- 15000

3. Rs. 20/- 4000 7. Rs. 1000/- 5000

4. Rs. 50/- 3000

This screwed pattern of high denomination notes has put people to inconviencance, due to inadequate logistics system of supplying new currency notes of Rs. 500/- and new denomination note of Rs. 2000/- to banks, ATM’s and post offices. However as per Business Standard of 21st November 2016, between 2007 to 2012, transactions in cash has come down from 90.60% in 2007 to 86.60% in 2012 and appears to have gone down further as shown in table B below.

Table B

Sr. No.

Particulars Financial year 2007

Financial year 2008

Financial year 2009

Financial year 2010

Financial year 2011

Financial year 2012

1. Payment by card

2.80 3.10 2.90 2.80 3.50 4.10

2. Electronic direct

2.60 3.00 3.80 4.50 5.60 6.80

3. Cash transaction

90.60 90.00 89.70 89.50 87.90 86.60

4. Cheque / Demand Draft

4.00 3.90 3.60 3.20 2.90 2.50

Total 100 100 100 100 99.90 100

Construction and Real estate sectors gives employment to almost four crore people, mostly unskilled and surplus farm labour. Despite the fact that it is the second biggest employer after agriculture, almost 87% of industry being in unorganised sector depends heavily on cash transaction. Figure given in Table ‘C’ below proves predominant nature of construction Industry:-

Table ‘C’ (figures are in Rs. Cr. At 2011-12 period)

Sr. No.

2011-12 2012-13 2013-14 2014-15

1. Total Output (read turnover) of construction Industry as per National Account Statistic 2016.

2141012 2163885 2254046 2379885

2. Turnover of listed companies at current prices.

160413 165615 150195 147653

3. Estimated turnover of private limited companies and non-listed limited companies taken as similar to that of listed companies. Stated at Serial No. 2 above.

160000 166000 150000 147000

4. Total turnover in organised sector. (2+3)

320413 331615 300195 294653

5. Wholesale Price Inflation. Stated in India Economy Review October

8.94% 7.36% 5.98% 2.00%

2016 issue, Page No. 116.

6. Turnover of organised sector converted at 2011-12 prices by deduction on W.P.I. rate.

291769 307209 279242 288760

7. Turnover of organised sector in percentage term of total turnover.

13.62 14.19 12.38 12.13

8. Turnover of unorganised sector in percentage term of total turnover.

86.38 85.81 87.62 87.87

Each activity in construction business be it excavation, concreting, Centering, plastering etc is outsourced either by engaging sub-contractors or labour contractors. Contraction workers are by and large being migratory are daily wage earners. Demonisation is a heavy blow to them for their daily ration, bread and butter. So is the case with labour / sub contractors not able to give wages in new currencies due to inadequate supply. Net result is stoppage or slowdown of work till such time owner contractor / sub-contractor / labour contractor are pays to them in new currency of Rs. 500/- or so. Real estate sector even otherwise was affected by reduced number of new launches, diminishing sale and high number of unsold flats as published in Indian Express dated 13.11.2016 as per details given in Table ‘D’ below:-

Table ‘D’ (Numbers in 1000’s)

Sr. No.

Particulars 2011 2012 2013 2014 2015

1. Number of units launched

450000 450000 400000 300000 250000

2. Number of units sold

350000 350000 325000 280000 290000

3. Number of unsold units

100000 100000 175000 20000 -40000

4. Aggregate number of unsold unit.

100000 200000 375000 395000 355000

National Capital Region and Mumbai Metropolitan Regions are worst affect compare to Pune, Bengluru, Hyderabad, and Chennai. An associated chamber of commerce & Industry’s report realesed in 2015 states that about 75% of 3540 real estate projects with investment over Rs. 14/- lakh crores were non-starter with demonetisation by government, high end flats sale shall come down in next 12/24 months. Coupled with implementation of Real Estate Regulatory Act from April 2017, expert feds that cash component in real estate would come down drastically. Real estate sector shall receive big blow due to of demonetisation. Times of India in it’s 22.11.2016 reported that stamp duty collection on registration of property document came down to 4721 numbers in Maharashtra with collection of Rs. 41.07 crores per day between 9.11.2016 to 21.11.2016 against normal of 7221 numbers of document collecting Rs.

57.06 crores per day. Mumbai Metropolitan Region coupled with Pune is the biggest real estate market in the country. In this region banking facilities and ATM are more extensive. Despite this, fall in the stamp duty collection is almost 30% in the first 12 days, whereas document registration number came down to more than 30%. Scenario in other market such as NCR, Chennai, Bengluru, Kolkata, Hyderabad and Ahmedabad and tier II towns is likely to be more distressing. Indian construction feels that Prices will not go down but document value will go up, since cash component is expected to come down. However in long run demonetisation coupled with Real Estate Regulation Act, Benami Act and GST, will transform real estate sector in longer term. In contrast to real estate sector, construction activity in most of EPC and infra sector shall have little impact due to demonetisation, because most of projects are government funded and having banking transactions. However, small contractors due to cash crunch will have some disruption in medium term. So is the case with toll collection of BOT Projects. Building material industry such as cement, tiles and paint shall have negative impact due to slowdown in building construction and real estate sector, having 60 to 65% of consumption.


Respected Sir,

Sub: Enhancing the cash withdrawal facility for Construction Industry.



Dr. Urjit R. Patel Hon’ble Governor, Reserve Bank of India Government of India 16th Floor, Central Office Building, Shahid Bhagat Singh Marg, MUMBAI – 400 001

Shri Narendra Modiji Hon’ble Prime Minister of India Government of India Prime Minister’s Office, South Block, NEW DELHI – 110 001

Shri Arun Jaitley Hon’bl e Union Minister of Finance Government of India Room No. 134, North Block, NEW DELHI – 110 001

Builders Association of India (BAI) is an

organization formed for ensuring transparency, competitive rates efficiency and technical perfection in the field of awarding and execution public works of the Government and its various departments. It also stands for the welfare of the construction contractors.

BAI, at the outset, wholeheartedly welcome the demonetisation of Rs. 500/- and Rs.1,000/- notes and extend our support for the measures for eliminating black money and fake currency from our economic system. We will wholeheartedly co-operate with procedures adopted by Reserve Bank of India (RBI) and the Government for the implementation of the demonetisation programme. In this juncture it may bring into your kind attention about some of the difficulties in executing the allotted public works and the resultant plight faced by the builders in the country.

Shortage of currency in making cash payments leads

to the stagnation of works. The withdrawal limit of Rs.50,000/- weekly, from the Current Account is creating troubles in the execution of the on-going public works and the beginning of the allotted works.

A medium size Real Estate Developer or Contractor normally requires around Rs. 3,00,000/- (Rupees Three Lakh) to meet the daily expenses for carry out the works. In which almost all the payments are to be made in currencies. It includes payments to sand, metal, filling fuels, transportation of materials, cost for food of labours, rentals of machines and wages of labours. The prevailing practice in the field is that all these payments are to be settled on a daily basis. The suppliers, service providers and the labours are only amenable for cash payments. Hence, the present limit in withdrawal from the current account is creating much problems in executing public works.

BAI would like to submit that the above said curb in withdrawal from the Current Account leads to the delay in completion of the public works. It will cause huge loss to the exchequer.

The works allotted to the members of the Builders Association of India by the Government is mainly in the nature of public utilities. Therefore, non implementation or delay in completion of these works may lead to public unrest.

We are facing huge loss due the cessation works. We are in a difficult situation to meet the commitments to the financial institutions who are the lenders of large amounts for the works. If the present crisis continues it will certainly ends up in the total perish of the builder community.

Moreover, our men and machinery are idling. It affects our efficiency and productivity. The labours started deserting us due to the non-payment of wages, the idling construction materials facing corrosion and the suppliers of machines started recalling it due to non-payment of rent. If the crisis prolonged it will be a herculean task to recoup the men and machinery for the prompt execution of works.

Hence, it is most respectfully submitted that the present limit of Rs.50,000/- in withdrawal from Current Account may be modified to avoid the hardships faced by Construction Workers.

Thanking you,

Yours faithfully,

AVINASH M. PATIL


Ref: 401/N/2016-17 dated November 28, 2016 Shri Narendra Modiji Hon’ble Prime Minister of India Government of India Prime Minister’s Office, South Block, NEW DELHI – 110 001 Respected Sir,

Sub: Enhancing the cash withdrawal facility for Construction Industry.



Builders Association of India (BAI) is an organization formed for ensuring transparency, competitive rates efficiency and technical perfection in the field of awarding and execution public works of the Government and its various departments. It also stands for the welfare of the construction contractors.

BAI, at the outset, wholeheartedly welcome the demonetisation of Rs. 500/- and Rs.1,000/- notes and extend our support for the measures for eliminating black money and fake currency from our economic system. We will wholeheartedly co-operate with procedures adopted by Reserve Bank of India (RBI) and the Government for the implementation of the demonetisation programme. In this juncture it may bring into your kind attention about some of

the difficulties in executing the allotted public works and the resultant plight faced by the builders in the country.

Shortage of currency in making cash payments leads

to the stagnation of works. The withdrawal limit of Rs.50,000/- weekly, from the Current Account is creating troubles in the execution of the on-going public works and the beginning of the allotted works.

A medium size Real Estate Developer or Contractor normally requires around Rs. 3,00,000/- (Rupees Three Lakh) to meet the daily expenses for carry out the works. In which almost all the payments are to be made in currencies. It includes payments to sand, metal, filling fuels, transportation of materials, cost for food of labours, rentals of machines and wages of labours. The prevailing practice in the field is that all these payments are to be settled on a daily basis. The suppliers, service providers and the labours are only amenable for cash payments. Hence, the present limit in withdrawal from the current account is creating much problems in executing public works.

BAI would like to submit that the above said curb in withdrawal from the Current Account leads to the delay in completion of the public works. It will cause huge loss to the exchequer.

The works allotted to the members of the Builders Association of India by the Government is mainly in the nature of public utilities. Therefore, non implementation or delay in completion of these works may lead to public unrest.

We are facing huge loss due the cessation works. We are in a difficult situation to meet the commitments to the financial institutions who are the lenders of large amounts for the works. If the present crisis continues it will certainly ends up in the total perish of the builder community.

Moreover, our men and machinery are idling. It affects our efficiency and productivity. The labours started deserting us due to the non-payment of wages, the idling construction materials facing corrosion and the suppliers of machines started recalling it due to non-payment of rent. If the crisis prolonged it will be a herculean task to recoup the men and machinery for the prompt execution of works.

Hence, it is most respectfully submitted that the present limit of Rs.50,000/- in withdrawal from Current Account may be modified to avoid the hardships faced by Construction Workers.

Thanking you,

Yours faithfully,

AVINASH M. PATIL


BAI’s Appeal to centres/members for not to deposit cash in BAI’s Bank A/c due to demonitasation which is reproduced below.

Ref.: 394/N/2016-17 dated 23rd November, 2016

Chairmen and Office-Bearers of all BAI Centres Members of the Managing Committee and General Council of BAI Dear Sirs, Reg.: Request to not to deposit cash in Current/SB A/c of

BAI. This is to request all BAI Centres as to not to deposit CASH in the BAI Centres Bank Account to which the BAI PAN Card bearing number AAATB0212F is linked. By ‘CASH’ we mean amount for which, the Centre will not be able to give explanation or show as the deposited cash was ‘Cash in hand’ as on 8th November, 2016. The above request is arising out of demonetisation of Rs. 1,000 and Rs. 500 currency notes by Government of India and subsequent caution issued by taxation authorities to Trusts, as mentioned in all newspapers across India. (Copy of circulars and News item attached). Please contact the undersigned for any further clarification. Thanking you,

Yours Faithfully,

RAJU JOHN

EXECUTIVE SECRETARY BUILDERS’ ASSOCIATION OF INDIA

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-

SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE

DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES

NOTIFICATION

New Delhi, the 15th November, 2016 G.S.R 1068(E).- In exercise of the powers conferred by section 285BA, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income–tax (30th Amendment) Rules, 2016. (2) They shall come into force from the date of their publication in the Official Gazette. 2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), in rule 114B, in the Table, for serial number 10 and entries relating thereto the following serial number and entries shall be substituted, namely:- Sl. No.

Nature of transaction Value of transaction

(1) (2) (3) “10. Deposit with,-

(i) a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act); (ii) Post Office.

Cash deposits,- (i) exceeding fifty thousand rupees during any one day; or (ii) aggregating to more than two lakh fifty thousand rupees during the period 09th November, 2016 to 30th December, 2016

3. In the said rules, in rule 114E,

(i) in sub-rule (2), in the Table, after serial number 11 and entries relating thereto the following serial number and entries shall be inserted, namely:-

Sl. No.

Nature and value of transaction

Class of person (reporting person)

(1) (2) (3) ii) two lakh fifty

thousand rupees or more, in one or more accounts (other than a current account) of a person.

clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898).”;

ii) in sub-rule (5), the following proviso shall be inserted, namely:- “Provided the statement of financial transaction in respect of the transactions listed at serial number (12) in the Table under sub-rule (2), shall be furnished on or before the 31st day of January, 2017.”.

[Notification No. 104/2016][F.No.370142/32/2016-TPL] (Dr. T.S. Mapwal)

Under Secretary to the Government of India Note:- The principal rules were published vide notification S.O. 969 (E), dated the 26th March, 1962 and last amended vide notification S.O.3399(E), dated 07th November, 2016.

Income Tax department sends warning note to trusts, societies

Sources said more such notices will be sent in the coming days

The Income-Tax Department has started sending notices to societies and trusts, including religious and charitable trusts, asking them to inform it about cash balances as on November 8, the day the government announced the decision to demonetise Rs 500 and Rs 1,000 notes. Sources said more such notices will be sent in the coming days. While the move is being dubbed as a “preventive measure”, sources in the I-T department said the government has decided to take “strictest possible action” against those who are found to have violated the law. The notices are being sent under Section 133(6) of the Income Tax Act, 1961, which empowers the I-T authorities to compel banks and other authorities to furnish information which could be useful in connection with any pending proceeding or enquiry. “Submit cash balances as per your books of accounts of all institutions being run by you as on 31-03-2016 and as on close of 08-11-2016 to this office,” says a notice accessed by The Indian Express. The reason for seeking the information is mentioned in the notice itself. “In the backdrop of this demonetisation of old currency notes, the department is also aware of the pressure or temptation that may be there on trusts and societies to accommodate others,” says the notice. Stating that all deposits made in banks after November 8 “shall be part of scrutiny by the department after 30th December, 2016”, the notice also advises the management of such institutions not to deal with Rs 1,000 and Rs 500 notes, “by either accepting cash or paying in cash for any of your activities after November 8, 2016”. “There are indications that some persons and/ or organisations have prevailed upon managements of some trusts and societies to accept their currency notes of high denomination and show

Sl. No.

Nature and value of transaction

Class of person (reporting person)

(1) (2) (3) “12.

Cash deposits during the period 09th November, 2016 to 30th December, 2016 aggregating to (i) twelve lakh fifty thousand rupees or more, in one or more current account of a person; or

(i) A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); (ii) Post Master General as referred to in

the same as cash in hand. This is a much abused way to turn black money into white. We have some specific instances also that we are following up on. However, these notices are only to ensure that such illegal acts are stopped. Failure of the persons to whom we have sent notices to furnish the information sought by us by November 18 will result in penal proceedings under the Act,” said a senior I-T officer.

PLATINUM JUBILEE CELEBRATION OF BAI

BAI is at threshold of history having been formed in 1941. It has in year 2016 completed seventy five years journey. Construction is a hard line with long working hours. It needs of initial fixed investment is low, whereas it’s working capital requirement is high. All its activities are outsourced to different people/agencies. In view of this peculiarities, individual initially start with construction business but during course of next 20/30 years, changes business. As a result mortality rate in industry is quite high. In a given scenario not only to survive but to grow is a stupendous achievement, for a trade association like BAI. It initially started with 13 members and as of now spread over 150 plus centres with direct membership 15,000 business houses and indirect membership of 1,00,000 through its affiliated associations. The Managing Committee Meeting held at Ahmedabad on 30th May 2015, have entrusted the Chairmanship of ‘Platinum Jubilee’ celebration of BAI to Shri R. Radhakrishnan, Past President & Past Trustee of BAI. The Co-Chairmen of the Committee are Shri B. Seenaiah, Past President; Shri Sushanta Kumar Basu, Imm. Past President; and Shri D.L. Desai (Shankarbhai), Trustee. Past Presidents are Members of the Committee and all Office Bearers of the Headquarter will be Ex-officio Members. The Committee was also empowered to add more members, as we have decided to publish a Memoir of BAI with all relevant information pertaining to BAI history. The Organising Committee Members of Platinum Jubilee celebration have unanimously decided to direct BAI Centres to celebrate the Platinum Jubilee. Centres should organise programmes with the following templates:- • Aim to touch all age groups with the celebration.

• Competitions for children.

• Essay debate competitions for High School and College Students.

• Special programmes for budding Civil Engineers.

• Aim to create one good permanent infrastructure for the city like a circle, toilet block, hospital, school, training centre etc.

• To felicitate a senior most Builder (Member of BAI).

• To conduct health care camps for construction workers.

• To organise ‘Well Built Structure Award’.

• Target one programme for home makers, they can be your biggest ambassadors.

• A Sports Olympics for Construction Workers.

• One Seminar on the role of the Construction Industry in development, involve all the departments that we are connected with. Let them realise the importance and glory of this industry and organisation.

• One grand programme involving the local MP, MLA, Mayor, Commissioner, etc.

'Concluding Function' of BAI's Platinum Jubilee Celebrations

On Saturday 5th November, 2016 the 'Concluding Function' of BAI's Platinum Jubilee Celebrations commenced in the morning the in sprawling and prestigious Chennai Grade Centre. Chief Guest, Mr. M. Venkaiah Naidu, Hon'ble Union Minister for Urban Development, Housing & Urban Poverty Alleviation and Information & Broadcasting, hoisted the BAI Platinum Jubilee Flag to commence the celebrations in front of the Convention Hall at Chennai Trade Centre in the presence of Mr. Avinash M. Patil, President, BAI; Bhishma R. Radhakrishnan, Chairman, Platinum Jubilee Celebrations Committee; Mr. A. S. Chinnaswamy Raju, Mr. B. Seenaiah - Past Presidents, BAI; Mr. K. Venkatesan, Chairman, BAI Southern (Chennai) Centre and other office-bearers and senior functionaries of BAI and BAI Southern (Chennai) Centre. The Convention Hall was filled to its brim by BAI members across the length and breadth of India to witness the historic event. Thereafter Hon'ble Minister was offered breakfast in the VIP lounge, wherein he showed his simplicity by requesting for an informal breakfast with other members, so that he can be amongst BAI members. He had earlier informed that he will be arriving early and would like to interact with BAI's senior on industry issues. Hence, after the breakfast, he went to the VIP lounge, wherein he was briefed about BAI's views of RERA by Mr. K. Sriram, Past State Chairman, BAI Karnataka; some industry issues by Mr. B. Seenaiah, Past President, BAI; about skill development in construction industry by Mr. Sushanta Kumar Basu, Past President, BAI and about the recent decision by Cabinet Committee on Economic Affairs by Mr. Neerav Parmar, Hon. Gen. Treasurer, BAI. He patiently heard their submissions and assured that he would try to redress the problems.

Inauguration The inauguration ceremony 'Concluding Function' of BAI's Platinum Jubilee Celebrations started at 08.55 a.m. with an invocation song. Dignitaries who graced the dais during the inauguration ceremony were : Mr. M. Venkaiah Naidu, Hon'ble Union Minister for Urban Development, Housing & Urban Poverty Alleviation and Information & Broadcasting; Mrs. B. Radhika Chakaravarthy, Chief Post Master General, Chennai City; Mr. S. N. Subrahmanyan, Whole Time Director, Deputy Managing Director and President, M/s Larsen & Toubro; Mr. Avinash M. Patil, President, BAI; Bhishma R. Radhakrishnan, Past President, Past Trustee BAI & Chairman, Platinum Jubilee Celebrations Committee; Mr. Mu. Moahan, Vice-President, BAI; Dr. R. B. Krishnani, Vice-President, BAI; Mr. R. N. Gupta, Vice-President, BAI; Mr. C. G. Deochake, Hon. Gen. Secretary; Mr. Neerav Parmar, Hon. Gen. Treasurer, BAI; Mr. Lal Chand Sharma, Imm. Past

President, BAI; Mr. A. S. Chinnaswamy Raju, Past President, BAI; Mr. B. Seenaiah, Past President, BAI; Mr. M. Thirusangu, State Chairman, BAI Tamilnadu, Puducherry, Andaman & Nicobar Islands; Mr. K. Venkatesan, Chairman, BAI Southern (Chennai) Centre; Mr. K. Ramanujam, Chairman, Organising committee and Mr. S. Ramaprabhu, Hon. Secretary, BAI Southern (Chennai) Centre. Hon'ble Minister thereafter lighted the traditional lamp (KuthuVilakku) in the presence of other dignitaries. Mr. K. Venkatesan delivered the welcome address. He elaborated about the history of the BAI Southern (Chennai) Centre and thanked BAI, in particular the President and Managing Committee, for giving Southern (Chennai) Centre the opportunity of organising the Platinum Jubilee Celebrations. It was also brought to the notice of the Hon'ble Minister that BAI Southern (Chennai) Centre is the largest BAI Centre in India having 2200 members with a history of 65 years. Mr. Avanish M. Patil delivered the presidential address. In his address he dwelt at length about the role played by the construction Industry in the development of the country by providing the infrastructure facilities like roads, bridges, metro railways, irrigation projects, airports, sea ports, etc. He also mentioned about the construction industry's contribution towards providing housing for the society at large. He pointed out that the construction industry is the second largest industry in providing maximum employment for skilled and unskilled workers - next to agriculture. He further added that construction industry is playing a major role in the economic growth of the country by contributing a sizable share to its GDP growth. Release of Special Postal Cover & Stamp Mrs. B. Radhika Chakaravarthy, Chief Post Master General, Chennai City Region released a Special Cover and Stamp to commemorate the Platinum Jubilee Celebrations of BAI. Hon'ble Minister received the Special Postal Cover and Stamp and formally handed it over to Mr. A. S. Chinnaswamy Raju. This historic event of releasing the Special Postal Cover and Stamp to commemorate the celebration is the first of its kind in the history of BAI. It was a proud moment for the contractors and builders fraternity. Release of book - '75 Years of Glorious existence - the never ending journey of excellence' Bhishma R. Radhakrishnan, dwelt in detail about the journey of BAI and its glorious achievements during 75 years of its existence with excellence in every initiative and endeavour as its thrust. In this context he credited Brig. Jackson, a British Engineer in the Military Engineering Department as the founding father of BAI in 1941 at Pune. He went on the add that BAI was started with just thirteen members and today BAI is proud to have more than one lakh direct and indirect members, having 160 centres through the length and breadth of the country. This is the only trade body which has the distinction of growing upto the Celebration of

its Platinum Jubilee. In his address he also saluted the architects of this great institution, who made it possible with their dedicated involvement, to mention a few - Mr. H. J. Shah, Mr. R. J. Gandhi, Mr. Amarjit Singh Choudhary, Mr. N. Neelakanrtan Iyer, Mr. M. N. Rajaraman, Mr.S. A. N. Raganatha Achar, Mr.Ajit Gulabchand, Dr. T. N. Subbarao, Mr. A. S. ChinnaswamyRaju, Mr. C. L. Varma, Dr.Brahm Dutt, etc. He had a special word of praise for the Panelists who had helped him in bringing out the book. The Panelists are Chanakya D. L. Desai (Shankarbhai), Mr. J. R. Sethuramalingam, Mr. L. Venkatesan and Dr. D. Thukkaram. In his address he profusely thanked Hon'ble Minister Mr. M. Venkaiah Naidu who had accepted to be the Chief Guest and release the book. He appreciated the simplicity of the Minister for his gracious request to have breakfast along with the members . Before concluding Mr. R. Radhkrishnan thanked Mr. Lal Chand Sharma, Immediate Past President and the Managing Committee for the unique opportunity bestowed to him to be the Chairman of this great event. After this the Hon'ble Minister released the book '75 Years of Glorious existence - the never ending journey of excellence'. The first copy of the book was received by Mr. B.Seeniah. Honouring the Stalwarts On the occasion, Mr. K. V. Rangaswamy, Former Board Member and former President, M/s Larsen & Toubro was conferred with 'Nirman Ratna' Award. Bhishma R. Radhakrishnan was conferred with 'Seva Ratna' Award. Both of them were honoured with shawl, garland and adorned with Mysore Pheta by Hon'ble Minister. Mr. A. S. Chinnaswamy Raju and Mr. K. Venkatesan. A citation was read and presented to both the Awardees. A plaque engraved with the words 'Nirman Ratna' and 'Seva Ratna' were presented to Mr. K. V. Rangaswamy and Bhishma R. Radhakrishnan respectively with their photographs in the plaque, was also presented. A Gold Haaram with a medallion engraved with the word 'Seva Ratna' was presented to Bhishma R. Radhakrishnan by Mr. M. Karthikeyan, Past President, BAI on behalf of the Platinum Jubilee Celebration Committee. Mr. S. N. Subrahmanyan in his special address mentioned that he was happy to have associated himself in this historic celebration. He thanked the organisers for recognising the role played by his Guru in L&T Mr. K. V. Rangaswamy in the development of the construction industry for the past four decades and for honouring him with the prestigious award of 'Nirman Ratna'. He said he was also happy to witness the awarding of 'Seva Ratna' being conferred on another stalwart Bhishma R. Radhakrishnan which he richly deserves. He also mentioned that BAI is doing yeomen service for construction sector of this country and L&T is always proud to be associated with them in such events. He assured that in the

coming years also L&T will continue to extend its goodwill and co-operation to such events as in the past. Hon'ble Minister Mr. M. Venkaiah Naidu in his address regaled the audience with his inimitable way of speech loaded with pun and humour about the serious business of nation building. In spite of his very busy schedule he made it a point to participate in this important milestone event not only because of the significance of the Platinum Jubilee but also since the organisation is honouring two stalwarts Mr. K. V. Rangaswamy and Bhishma R. Radhakrishnan who have done yeomen services to the construction industry. He praised their contribution to nation building through their services. He stressed the importance of infrastructure development in the contribution to the GDP growth of the country and appreciated the role played by L&T in this endeavour. In this context he extolled the virtues of our Hon'ble Prime Minister Mr. Narendra Modi, in his single minded focus of nation building, by involving industrialists and trade bodies in the process. He mentioned that the next five year plan invokes the public private partnership as the fulcrum of activity to ensure 7% to 8% GDP growth. He stressed the need for a multi directional, sustainable growth, which means the various arms of the society, be it banks and financial institutions, trade & industry bodies, etc. have to contribute their mite to ensure the fruits of their labour reach an inclusive society. He explained the thrust areas of the Prime Minister's development agenda as reform, perform, transform with public private partnership. He dwelt at length about the recent Bill passed in the Parliament regarding the Real Estate Regulation Act (RERA) and said that it is only 'regulation' and not 'strangulation' of the sector. He was pained to see that due to a few bad apples in the sector, the whole real estate sector was getting a bad name and stressed that BAI weed out such entities and follow the regulations, which will go a long way in making the people recognise the value of this sector which is also extending its hand in providing housing for millions of people. He assured that during the implementation of RERA, if the sector faces any bottlenecks in their operations, he will arrange a meeting with the Prime Minister himself, to iron out the issues. He also touched upon the 'Make in India' campaign, the 'Swach Bharat' campaign, the 'Beti Padao / Beti Bachao' campaign, 'Skill Development Program', etc to emphasise the need for contribution from all the stakeholders of the society to ensure that India becomes a real super power in the years to come. He was very appreciative of the role played by BAI and the office bearers in this endeavour and wished them all the best for their future. Mr. K. Ramanujam in his address appreciated the various committee members for their untiring contribution for the success of the greatest event in the history of BAI. He thanked the Southern (Chennai) Centre Chairman Mr. K. Venkatesan for giving him the opportunity to be the Chairman of the Organising committee for this wonderful event. He expressed his gratitude to Bhishma R. Radhakrishnan for his untiring efforts in the fund raising activities which is an essential requirement for the success of any event of this magnitude.

Felicitation Mr. A. S. Chinnaswamy, Mr. B. Seenaiah, Mr. A.K. Yussouf and Mr. M. Karthikeyan - Past Presidents of BAI garlanded and felicitated Bhishma R. Radhakrishnan and expressed their wholehearted happiness for the honour bestowed on him as 'Seva Ratna'. They expressed that he richly deserved this honour for his untiring contribution, sacrificing his family and business for over four decades in the cause of the development of the construction industry. Bhishma R. Radhakrishnan, during his felicitations to Mr. K. V. Rangaswamy for being the receipient of the prestigious 'Nirman Ratna Award' mentioned that BAI was highly privileged to honour Mr. K. V. Rangaswamy with this greatest award of 'Nirman Ratna' on this historic occasion of Platinum Jubilee Concluding Celebrations. He added that Mr. K. V. Rangaswamy was the pride of India in the construction sector. He has created several monuments nationally and at international levels. Some of his specialised structural designs have won several awards in the International level and his contribution to the construction industry is unparalleled at any point of time. He particularly emphasised Mr. Rangaswamy's love and affection towards BAI and his encouragement to the BAI for all its activities. He was not only a great engineer but had also created a lot of eminent engineers with his advice and guidance. One among them is Mr. S. N. Subrahmanyan, which was acknowledged by Mr. S. N. Subrahmanyan during his speech. Bhishma R. Radhakrishnan highlighted that BAI on this historic occasion highly feels proud to honour the great technocrat. In his acceptance speech Bhishma R. Radhakrishnan expressed his gratitude to one and all for honouring him with 'Seva Ratna' award during this historic celebration of Platinum Jubilee Concluding Celebrations. Though he wondered whether he was worthy of receiving this award, he accepted the same in view of the love and affection of the institution. He empathically mentioned that he was dedicating this award to the Southern (Chennai) Centre, to his well wishers, to his mentor like Mr. Neelakantan Iyer, Mr. M. N. Rajaraman, Mr. S. A. N. Ranganatha Achar, Dr. T. N. Subba Rao, Mr. A. S. Chinnaswamy Raju, his close associates and to his parents. He was humble enough to say that these awards make him feel more responsible for his future involvement and gave him more courage and strength of mind to serve for this fraternity till his last beat of his heart. Before his conclusion, he emotionally he assured he will serve this fraternity not as leader but as a soldier, as a humble worker taking command from the people at the helm of affairs. Technical Session In the post lunch session, the members were treated to technical information of the highest cadre interspersed with PowerPoint Presentation. Mr. V. Somasudharam, Former advisor, Chennai Metro Rail spoke about tunnelling of Metro Rail Project. Mr. Sudhakar of M/s Schwing Stetter India Pvt. Ltd. spoke about Modern Construction Equipment and Technology.

Oratorical Competition In commemoration of the Platinum Jubilee Concluding Celebrations, Oratorical Competition was organised for the civil engineering students from various engineering colleges on 7th October, 2016 in Chennai on the subjects, "Get equipped with modern trends in construction techniques" and "Today's Civil Engineers - Nation Builders of Tomorrow”. The finals of the Oratorical Competition was held on 27th October, 2016 on the topic "Vision 2020 - Skill India to Build India" and out of eight students three were selected as the winners, viz. . 1. Ms. Akshya of Mr. Venkateswara Engineering College 2. Ms. D. J. Hema Malani of GKM College of Engineering 3. Ms. U. Priyadharshini of Velammal Engineering College They were presented with a trophy and certificate each.

Vote of thanks Mr. S. Ramaprabhu proposed a formal vote of thanks. He profusely thanked the Hon'ble Minister Mr. M. Venkaiah Naidu for his participation as Chief Guest and for being present for more than two and half hours inspite of his busy schedule. He profusely thanked the BAI President and Headquarters for giving Southern (Chennai) Centre the golden opportunity for organising Platinum Jubilee Concluding Celebrations. He also thanked Bhishma R. Radhkrishnan for his guidance and support for the success of this event. He also thanked all Past Presidents, all the EC/GC/MC and other members and special invitees who were present in large numbers from across India for this historic function. He also thanked the sponsors for their support without whom the function would not have been such a huge success. Valedictory Function After a high voltage inaugural session and informative technical in the morning and afternoon, the Valedictory Function was held in the evening. It was also time to enjoy the Platinum Jubilee Concluding Celebrations with a bang and a cultural programme was organised which lasted an hour. After the rendering of the 'Tamizh Thai Vaazhthu', Mr. K. Venkatesan welcomed the gathering to the evening session. There was a special warm welcome for Mr. Avanish M. Patil, a Past Presidents, all head quarters Office Bearers, all Centre Chairman and Members from the length and breadth of the country. Mr. M. Thirusangu, State Chairman, BAI Tamil Nadu Puducherry, Andaman and Nicobar Islands and Mr. Mu. Moahan, Vice President, BAI also addressed on the occasion. Honouring of All Past Presidents On the occasion, all Past Presidents present were honoured by the Platinum Jubilee Concluding Celebrations Organising Committee, viz. Mr. Lalchand Sharma, Mr. Sushanta Kumar Basu, Mr. B. Seeniah, Mr. Bhagawan J. Deokar, Mr. A. K. Yusouf, Mr. S. P. Goel, Mr. B. N. Dixit, Mr. V. Ramachandran, Mr. A. S. Chinnasamy Raju, Mr. M.

Karthikeyan and Bhishma R. Radhakrishnan. Mr. Avinash M. Patil the incumbent President was also honoured. On behalf of the Past Presidents, Mr. V. Ramachandran, thanked the Organising Committee of Platinum Jubilee Concluding Celebrations for felicitating them. Thereafter Mr. Avinash M. Patil released the 'Special Souvenir' brought out by the Platinum Jubilee Concluding Celebrations Organising Committee to mark the historic occasion and the first copy was received by Mr. Mu. Moahan, Vice President, BAI. The Platinum Jubilee Concluding Celebrations Organising Committee also honoured the BAI head quarters Office Bearers and Trustees with Yelachi Garland, Shawl, Turban and were presented with a memento, viz. Mr. R. N. Gupta, Mr. Mu. Moahan, Dr. Rajiv B. Krishnani - Vice-Presidents; Mr. C. G. Deochake, Hon. Gen. Secretary; Mr. Neerav Parmar, Hon. Gen. Treasurer; Mr. N. Sachitanand Reddy, Mr. M. Karthikeyan, Mr. Vijay Jagannath Devi, Mr. R. Suburaman, Mr. Lalchand Sharma - Trustees, Mr. K. John Paul, State Chairman - Kerala; Mr. K. S. Someshwara Reddy, State Chairman - Karnataka; Mr. B. Sugunakar Rao, State Chairman - Telangana; Mr. Ch. Ramakotaiah, State Chairman - Andhra Pradesh; Mr. M. Thirusangu, State Chairman - BAI Tamil Nadu Puducherry, Andaman and Nicobar Islands; Mr. Suresh B, Patil, State Chairman -Maharashtra; Mr. Nitin M. Shah, State Chairman -Gujarat; Mr. Sudip Kumar Dutta, State Chairman -Kolkatta and Mr. S. Ayyanathan, State Secretary, BAI Tamil Nadu Puducherry, Andaman and Nicobar Islands. Mr. Raju John, Executive Secretary, BAI and Mr. S. Madhusudan, Head Communications, BAI were also honoured with Shawl and Memento.

BAI Awards 2015-16 'BAI Awards 2015-16' were announced during the 75th AGM of BAI held on Saturday 2nd July 2016 at Nashik. The Award Presentation was held during the Platinum Jubilee Concluding Celebrations. 1. Overall Best BAI Centre

(Below 200 Members) : 1. Mysore Centre

2. Overall Best BAI Centre (Above 200 Members)

: 1. Southern (Chennai) Centre

2. Mumbai Centre

3. Image Building Activities by a Centre

: 1. Karnataka (Bangalore) Centre 2. Eastern (Kolkata) Centre 3. Tirupur Centre

4. Organising Best Training Programme or Seminar

: 1. Tirunelveli Centre 2. Pune Centre

5. Maximum Annual Membership Growth

: 1. Tiruchirappalli Centre 2. Muvattupuzha Centre 3. Guwahati Centre

6. Best Efforts by any Centre for Quality

: Durgapur Centre

Construction

7. Best Builders’ Day Celebrations.

: 1. Madurai Centre 2. Nashik Centre 3. Tiruchirappalli Centre 4. Kanyakumari Centre

8. Maximum Membership Retention

: 1. Kottayam Centre 2. Ulhasnagar Centre

9. Best publication by a BAI Centre

: 1. Southern (Chennai) Centre 2. Mumbai Centre

10. Best performing Chairman of BAI’s functional Committees.

: 1. Shri Neerav Parmar, Chairman, Legal & Arbitration Committee.

2. Shri K. Viswanathan, Chairman, Taxation, Royalty, Entry Tax, Direct Tax and Indirect Tax Committee.

11. Best performing State Chairman.

: Shri Sunil B. Mundada, State Chairman, Maharashtra.

12. Special Award for conducting XXVII All India Builders’ Convention

: Hyderabad Centre

In his special address, Mr. Avinash M. Patil, appreciated Southern (Chennai) Centre; Chairman, Platinum Jubilee Committee; Chairman, Co-Chairmen - Organising Committee and the various Committees for their untiring efforts to make this event a grand success Vote of thanks Mr. S. Ramaprabhu thanked President, Vice Presidents, Head Quarters - Office Bearers, State Chairmen, Trustees, All Centre Chairmen, All Members, Sponsors for their participation. He finally thanked all the Committee members from Southern (Chennai) Centre for their untiring efforts to make this event a grand success.

Major Constitutional Amendment. Two Regions created out of Southern Region. Southern Region has splitted into two regions, that is, Southern Region – I & II and same has been approved in the Special General Meeting of BAI held on 6th November 2016 at ITC Grand Chola, Guindy, Chennai.

Southern Region – I consists of Andhra Pradesh, Telangana and Karnataka States. Southern Region – II consists of Kerala, Tamil Nadu, Puducherry and Andaman & Nicobar. Each Region will elect Vice President from the respective Region.

Change of Guard at BAI BAI's Organisational Elections for 2017-18 culminated on the 30th March, 2017. Mr. Raju John, Executive Secretary, BAI officiated as the 'Returning Officer' for conducting the elections. Mr. H. N. Vijaya Raghava Reddy was unanimously elected as the President of BAI for 2017-18. Mr. Avinash M. Patil, President, BAI (2016-17) formally announced the results of "BAI's Organisational Elections for 2017-18" in the evening of 30th March, 2017. Result of the election of a Trustee necessitated due to the demise of Mr. M. Karthikeyan was also announced Mr. K. Ramanujam was unanimously elected as Trustee for the term 2016-19. On 31st March, 2017, Mr. R. Radhakrishnan, the senior most Past President of BAI, formally installed Mr. H. N. Vijaya Raghava Reddy as President of BAI for 2017-18 by adorning him with the "BAI's President's Medallion". He also installed the other officer-bearers of 2017-18. Subsequently, Mr. Avinash M. Patil handed over the 'BAI Key' to Mr. H. N. Vijaya Raghava Reddy, symbolising handing over of charge. A large number of senior functionaries of BAI from many Centres were present, which included BAI's office-bearers for 2016-17 and 2017-18 also. In the morning of 31st March, 2017 a joint meeting of Office-Bearers 2016-17 and Office-Bearers 2017-18 was held in the BAI office. Renovated BAI Secretariat inaugurated Considering the overall growth of BAI and its increased activities, it was being long felt that the BAI Secretariat in Mumbai should be spruced up suitably. Accordingly the Managing Committee of BAI at its meeting held in Patna on 20th December, 2013 sanctioned an amount of Rs. 50 lacs for renovating the BAI secretariat in Mumbai. Senior functionaries of BAI and many BAI Centres announced their contribution towards the ‘Renovation Fund’. M/s Design Variable – offered their honorary services in designing and supervising the executing of the renovation of the office. A ‘Renovation Committee’ consisting of Mr. Ram M. Bhatia, Past Vice-President, BAI and Mr. Neerav Parmar, Chairman, BAI Mumbai Centre (presently Hon. Gen. Treasurer, BAI) was formed in the Managing Committee and General Council Meeting held at Jaipur on 20th September 2014 to oversee the work. Subsequently, due to changes in layout and increased cost the sanctioned amount was increased to Rs. 60 lacs by the Managing Committee of BAI at its meeting held in Ahmedabad on 30th May, 2015. Finally on 31st March, 2016, a state-of-the-art secretariat was inaugurated by Mr. Lal Chand Sharma, President, BAI in the

presence of a galaxy of past and present office-bearers of BAI and many senior functionaries of BAI from across India. The newly renovated state-of-the-art secretariat of BAI in Mumbai boasts of the latest in office gadgets. Hi-tech office cabins for the senior staff members, a more spacious main conference room, a small conference room, video conferencing facilities in some of the office cabins and conference rooms, hi-tech work area for the office staff, pleasant and welcoming reception area, fully operational pantry, wash rooms with latest facilities, etc. While the Managing Committee had sanctioned Rs. 60 lacs but as the work progressed, there were changes in the layout due to site conditions and specification of the materials were upgraded due to which the cost is likely to go upto nearly Rs. 1 Core. It will take the cost to nearly Rs.1 Crore, out of which Rs.80,00,000/- towards Renovation has been expenditure and further earmark Rs.10,00,000/- towards upgradation. The following have contributed to the ‘Renovation Fund’. BAI is calling upon its members to send in their contribution also. Shri Lal Chand Sharma, President, BAI Rs.1,00,000

Shri V.M. Fazal Ali, Vice president, BAI Rs. 1,00,000

Shri Mahesh M. Mudda, Hon.Gen.Secretary,BAI

Rs.1,00,000

Shri A. Puhazhendi, Past Vice President, BAI Rs.25,000

BAI Muvattupuzha Centre Rs.25,000

BAI Madurai Centre Rs.25,000

BAI Rajasthan State on behalf of BAI centres in Rajasthan

Rs.5,00,000

BAI Gujrat(Ahmedabad) Centre Rs.50,000

BAI Ranga Reddy Centre Rs.75,000

Shri K.Vishwanathan, BAI Rs.50,000

Dr. Anand J.Gupta, BAI Rs.1,00,000

BAI Eastern (Kolkata) Centre Rs. 25,000

BAI Bharuch and Baroda Centre Rs.30,000

BAI Ulhasnagar Centre Rs. 25,000

Shri S. K. Samantha Rs. 1,00,000

BAI Nashik Centre Rs. 51,000

BAI Kottayam Centre Rs. 25,000

BAI Durgapur Centre Rs. 25,000

BAI Hyderabad Centre Rs. 25,000

BAI Durg-Bhilai Centre Rs. 25,000

BAI State Chairman Office, Tamilnadu State Rs. 50,000

BAI Guwahati Centre Rs. 15,000

As of now, BAI HQ had taken an adhoc advance of Rs.35 Lakhs from the general fund expecting BAI members or centres will contribute the same. BAI’s Representations to various Ministries.

Ref: 98/M/2016-17 dated 21st May 2016 Shri Narendra Modiji Hon’ble Prime Minister of India Government of India Prime Minister’s Office, South Block, NEW DELHI – 110 001 Respected Sir,

Sub: Unequal treatment of Construction Agencies

in the administration of justice.

Builders’ Association of India (BAI) is an apex all India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 16,000 business entities as members through its 153 plus Centres (Branches) throughout the country. Regional Associations Affiliated to BAI form indirect membership of more than 1,00,000. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as policy level problems faced by the construction industry. This involves making efforts to obtain from policy makers and authorities, the level of attention that the construction industry deserves in view of its tremendous contribution and importance to the economy. Construction contractors execute various departmental projects of the Governments and the procedure followed in more or less on the principle of pre audit by Government Engineers / Third party appointed by the Government Engineers. The basic two fundamental issues for this pre audit system are as follows:-

a) To avoid faulty construction that requires to be demolished and thus causing national wastage.

b) One man or one agency may commit a mistake but the second man / agency is very unlikely to make the same mistake.

This is a time tested procedure and is being followed successfully through centuries. Thus at every stage of design & construction, a process of pre audit and pre approval by Government Engineers / third party appointed by Govt. Engineers of work, is followed. Sir, out of thousands of such projects, one or two failures is not uncommon in the history of constriction in the developed countries and in our country also this does happen. In the latest of such incidents a part of the under construction Vivekananda flyover at Kolkata collapsed under dead load only and around twenty seven precious lives were lost . The failure could be caused by inadequacy of design provision, material failure, bad workmanship & supervision, etc. The right cause must be ascertained to avoid such occurrence in future and punish the guilty. Like every other past similar incident , here also ten officials of the construction Agency were put behind the bars and very unfortunately and, again like every other past similar incident, the Engineer who designed the bridge , the professor of Jadavpur University who proof checked the design, the KMDA Engineers who approved the drawings & released the same for construction and above all the KMDA Engineers who approved the work at every stage of construction are untouched and moving freely in the society. If the officials of the construction agency are at fault, so are the Engineers who checked and passed the design & construction – probably more so!

Both the groups , contractor’s and the departmental Engineers, were mandated to ensure a proper construction, which they definitely failed, and are therefore equals in the eyes of law and as per Article 14 of constitution, shall not be discriminated upon by the state. Sir, it is not our suggestion not to punish the guilty- in fact the officials of contractors as well as department must be punished if it is so found that they failed to act with required skill & knowledge which they professed to have possessed or they did not exercise, with reasonable competence the skill and knowledge which they did possess. Sir, unfortunately, the people who assist in the administration of Justice like police force and the bureaucracy in general, close their eyes on the performance of fellow government officials and prefer to go for easy preys like contractor’s engineers. We appeal to you, Sir, to kindly look into the matter and advise / instruct the state governments to act impartially and without any show of indulgence to their servants so that trials & punishments do not lead to a travesty of justice. Thanking you,

Yours faithfully,

AVINASH PATIL PRESIDENT

BUILDERS’ ASSOCIATION OF INDIA Copy to: Chief Ministers of all States

Ref: 114/M/2016-17 dated 31st May 2016

To, The Hon’ble Finance Minsiter, Ministry of Finance, North Block, New Delhi Dear Sir,

Sub : Request for restoration of exemption from countervailing duty on Pavers used for construction of road levied vide Notification No. 12/2016 dated 1.3.2016.

With reference to the above subject we seek to submit as under:

1. Builders’ Association of India (BAI) is an apex all India body of Engineering Construction Contractors and Real Estate Companies founded in 1941, with more than 16,000 business entities as members through its 153 plus Centres (Branches) throughout

the country. Regional Associations Affiliated to BAI form indirect membership of more than 1,00,000. The fundamental aim of the Association is to bring about all round improvements in the construction sector, while striving towards resolution of operational as well as policy level problems faced by the construction industry. This involves making efforts to obtain from policy makers and authorities, the level of attention that the construction industry deserves in view of its tremendous contribution and importance to the economy.

2. Since last two years, the Indian economy is in

expansion phase which need to be sustained in forthcoming years. Sustaining this rate of growth will need huge investments in physical infrastructure such as roads, railways and ports. An efficient transportation system is critical for sustaining economic growth and the burgeoning demand for passenger and freight movement. India has the second largest road network across the world at 4.7 million km. This road network transports more than 60 per cent of all goods in the country and 85 per cent of India’s total passenger traffic. The plan outlay for 2015-16 stepped up budgetary support for Road Transport and Highways to Rs 42,912 crore (US$ 6.43 billion).

3. Hon’ble Minister of Road Transport and Highways, Mr Nitin Gadkari has announced that the target for laying out new roads in India will be increased to 150,000 kilometers per year from 2016 compared to existing 96,000 kilometers. Amidst the growing demand for roads, it is imperative for the Government to encourage infrastructure development initiatives which includes facilitating availability of road construction machinery and equipment. Exemption from customs duty to road construction machinery i.e. slipform pavers and cone crushers prior to union budget 2016-17

4. Prior to amendment made in Union budget 2016-17, various road construction machineries were exempted from basic customs duty i.e. BCD, CVD and SAD. The Sr. No. 368 of Customs Notification No. 12/2012-Cus granted exemption from Basic Custom Duty (BCD) and Countervailing Duty (CVD). As far as Special Additional Duty (SAD) was concerned, Notification 21/2012-Cus dated 17.03.2012 (Sr. No.1) provided for exemption from SAD to specified goods on which no BCD and CVD is payable. The notification implies that SAD would not be payable on such goods. Thus road construction machinery were exempted from payment of BCD, CVD and SAD by reading together both customs Notifications. Exemption prior to Amendment made in Union Budget was as under:

Sr. No.

Chapter Description Standard Rate

Additional Duty Rate

Condition

368. 84 or any other Chapter

Goods specified in List 16 required for construction of roads

Nil Nil 9

Exemption from CVD and SAD withdrawn in Union Budget 2016-17.

5. The Union Budget, 2016 vide Notification No. 12/2016 dated 01.03.2016 has withdrawn the exemption with respect to CVD. The exemption with regard to Basic Customs Duty and Cess, however, remains. Thus the current entry is as under:

Sr. No.

Chapter Description Standard Rate

Additional Duty Rate

Condition

368. 84 or any other Chapter

Goods specified in List 16 required for construction of roads

Nil [-] 9

Note:- Additional duty = Countervailing duty which is 12.5%.

6. The effect of the amendment is that BCD would not be payable on the goods in question, viz. slipform pavers and cone crushers. However, exemption from CVD is removed from the customs notification. Since there is no exemption from CVD, the exemption from SAD would also not be available to road construction machineries. Withdrawal of exemption to road construction machinery will ruin the dream of Hon’ble Prime Minister for better infrastructure in the country.

7. Hon’ble Prime Minister is encouraging the foreign investors to invest in India and concept of make in India is being promoted. Our country is at the stage that we need foreign investment to become manufacturing hub of the world. By removing the exemptions available to developers of infrastructure will increase government spending after infrastructure. Certainly this is not the objective of the government.

8. The withdrawal of exemption from CVD and SAD would lead to increase the landing cost of the road construction machinery and equipment. The said increase in cost of machinery would have cascading impact on increase in road construction projects in the country. Thus the withdrawal of exemption from CVD and SAD will have huge impact on the cost of the all road construction projects in the country. Removal of exemption will have cascading effect as Cenvat Credit is not available.

9. Construction of public infrastructure like roads, water distribution canals etc. are exempted from payment of service tax. When the activity is exempted from payment of service tax the machinery like road paving machine etc. directly used for such activity is not eligible for cenvat credit. This will have an impact of cascading effect as credit of taxes paid is not available. Therefore, it is requested that the exemption be restored on road construction machinery.

10. In the light of the escalating need of the economy, the aforementioned withdrawal of exemption from CVD and SAD on the road construction machinery is out of place.

11. The import of machinery and equipment used in development of infrastructure, especially roads requires to be relaxed.

12. Hence, it is prayed that the exemption in respect of CVD and SAD be restored to its earlier position.

Thanking you,

Yours faithfully,

AVINASH PATIL


Conference on Implications of GST on Construction, Real Estate and Infrastructure Sector A ‘One day Conference on Goods & Service Tax’ was organized by BAI Mumbai Centre along with M/s Consult Construction, Ahmedabad 24th September, 2016 in Hotel VITS, Andheri East, Mumbai. Mr. Shyam Raj Prasad, Commissioner of Service Tax, was the Chief Guest. CA Tarun Ghia, Elected Central Council Member of the Institute of Chartered Accountants of India (ICAI) & Chairman, Committee for Members in Industry (CMII) of the ICAI, delivered the keynote address. Also present on the occasion were : Mr. Pradeep Nagawekar, Chairman, BAI Mumbai Centre; Mr. C. G. Deochake, Hon. Gen. Secretary, BAI: Mr. Neerav Parmar, Hon. Gen. Treasurer, BAI & Chairman, BAI’s Legal and Arbitration Committee; Mr. K. Vishwanathan, BAI’s Taxation, Royalty, Entry Tax, Direct Tax and Indirect Tax Committee and Mr. Raju John, Executive Secretary, BAI. Mr. Pradeep Nagawekar welcomed all the delegates which was followed by Key note speech of CA Tarun Ghia giving an overview and the complications in the construction sector as far as GST is concerned.

Mr. Shyam Raj Prasad then addressed the concerns of the members by highlighting the simple aspects of GST and giving a complete overview of what is being planned under GST. Various expert speakers spoke during the technical sessions viz. CA Sanjay Agarwal from Reliance Industries; Adv L. Badrinarayanan from Lakshmikumaran & Sridharan and CA Sandesh Mundra, Chairman, BAI’s Goods & Service Tax Committee. The topics covered during the conference discussion were as below :-

� Why our country needs GST?

� Current Complications in Construction, Real Estate and Infra Sector.

� Concept of Supply and Valuation under GST.

� Flow of Credits.

� Expected Implications on Inter-state Works Contract.

� Impact Analysis on various Projects and critical precautions to be planned in advance

� Transitional Issues with ongoing Projects.

� Panel Discussion on proposed representation by BAI and other sister bodies to Ministry of Finance.

� Followed by Question and Answer session. On the occasion a book on GST was released. The book has been authored by CA Sandesh Mundra and Naimish Padhiar along with several other co-authors.

The conference concluded with a panel discussion featuring CA Rajkamal Shah, CA Bharat Shemlani, CA Rajkumar Adukia, Mr. Neerav Parmar and Mr, K. Vishwanath, Chairman, BAI’s Taxation, Royalty, Entry Tax, Direct Tax and Indirect Tax Committee, wherein the panelists discussed on various issues that are expected to be faced under GST and the points where the representations may have to be given to the Finance Ministry.

Lot of participation came from the audience by way of queries throughout the day which was very encouraging for the organisers. A representation to Government of India has been made, based out of the discussion in the Conference. PADMA Awards Vis-à-vis BAI BAI for a long time started lobbying for bestowing Padma Awards for deserving contractors and it is thus decided to fix eligibility criteria for nominating contractors for Padma Awards. The following are the broad norms decided by the Office Bearers:-

a) He should be a Patron Member of BAI.

b) Those construction contractors who initiated mechanisation of construction activities on roads, be it hard surface (i.e. concrete) or flexible pavement (i.e. bitumen surface) or in other infrastructural facilities such as pipeline, ports, etc

c) Work carried out in remote and difficult areas such as Sikkim, North Eastern States, J & K, H.P. or work executed in country under hostile environment such as Afghanistan.

d) Pioneers in infrastructure development like first public private partnership work in roads, buildings, seaports, state transport, bus depots or bus stations.

e) Those construction contractors continuing business since 1947 or even earlier till date and have established name for quality workmanship.

f) Promoting use of green buildings or technologies in building works.

g) Socio Economic status and contribution of the contractor towards manpower and to the growth of construction industry.

h) Other honours, Awards received by the Contractor.

BAUMA CONEXPO INDIA 2016 ‘BAUMA CONEXPO INDIA 2016’ – the fourth International Trade Fair for Construction Machinery, Building Material Machines, Mining Machines & Construction Vehicles’ was held between 12th and 15th December, 2016 in HUDA Ground, Gurgaon. ‘BAUMA CONEXPO INDIA 2016’ is organised by Messe München (organisers of ‘bauma’ brand of exhibitions) and Association of Equipment Manufacturers (organisers of ‘CONEXPO-CON/AGG’ brand of exhibitions). BAI is a joint organiser of ‘BAUMA CONEXPO INDIA 2016’. ‘BAUMA CONEXPO INDIA 2016’ was inaugurated on 12th December, 2016. Present during the inauguration were, Ms. Santosh Yadav, Deputy Speaker, Haryana Legislative Assembly; Mr. Girish Shankar, Secretary, Department of Heavy Industry, Government of India; Dr. Silva-Garbade, Deputy Minister, Economic Sections, German Embassy in India; Mr. Patrick Santillo, Minister Counselor, US Embassy in India; Mr. Avinash M. Patil, President, BAI; Mr. Anand Sundaresan, President, Indian Construction Equipment Manufacturers’ Association and Mr. Igor Palka, CEO, M/s bC Expo India. “With infrastructure investment set to go up, demand for construction equipment will rise further and the Indian construction equipment revenues are expected to breach the US$ 23 billion mark. BAUMA CONEXPO INDIA is an international trade fair for construction machinery, building material machines, mining machines and construction vehicle

industry, which brings the industry together on one platform in India,” said Mr. Avinash M. Patil, in his address during the inauguration. After the inauguration the BAI President and other senior functionaries visited the trade fair. BAI President also formally inaugurated the BAI stand in the trade fair. BAI President also had a meeting with Mr. Qi Jun, Chairman of China Construction Machinery Manufacturers Association (CCMA), who are organising BICES 2017 – Beijing International Construction Machinery Exhibition and Seminar, which is to be held from September 20 to 23, 2017 at New Beijing International Exhibition Center. ‘BAUMA CONEXPO INDIA 2016’ had 647 exhibitors—of which 57% were international companies from 30 countries, occupying a total of 150,000 square meters of space. Nearly 31,000 participants visited the trade fair. XXVIII All India Builders’ Convention The Managing Committee Meeting held at Nashik, on 2nd July 2016, have unanimously accepted the proposal of BAI Karnataka (Bangalore) Centre for hosting “XXVIII All India Builders’ Convention” at Bangalore in the month January 2018. The Fourth Managing Committee & Second General Council

meeting held on 6th November 2016 at Chennai have

unanimously nominated Bhishma R Radhakrishnan, Past

President & Trustee, BAI as XXVIII All India Builders’

Convention Chairman. The committee also nominated Shri A.

S. Chinnaswamy Raju, Past President & Trustee, BAI as

Convention Chief Patron, Shri B. Seenaiah, Past President,

BAI and Shri H. N. Vijaya Raghava Reddy, Past Vice

President as Convention Patrons.

The Organising committee of the Convention will be headed

by the Sri K. Subramani as Chairman, Past Vice President,

BAI and Sri Basavaraj S Totad as Hon Secretary.

Subsequent to the MC&GC Meeting a State Level Meeting

was conveyed and XXVIII All India Builders’ Convention

Committee Office Bearers and Sub Committee Chairmen were

nominated unanimously.

Vice Chairmen are Sri D. Kempanna - Past State Chairman

and Mr. N.S. Muralidhar, Past State Chairman.

Joint Secretaries Sri B. M. Nataraju, Past Secretary, Karnataka

(Bengaluru) Center and Sri K. N. Babu Reddy, Secretary,

Karnataka (Bengaluru) Centre and Hon. Treasurer as

Sri G. M. Ravindra, Past Secretary, Karnataka Centre.

Sri K. Appi Reddy, Past Vice President, BAI, Sri A.

Chamaraja Reddy, Past State Chairman, BAI, Sri V. Srinivasa

Murthy, Past State Chairman, BAI and K. Sriram, Past State

Chairman, BAI were nominated as Advisers.

Further Sub committees were formed for various activities.

It was discussed and decided to charge Rs.10,000 + applicabale Tax as Delegation fee for members and for Spouses it was decided to charge Rs.7,000 + applicabale Tax. The same was unanimously approved.

BAI & HR Matters HIDA Employers’ Organizations Cooperation Programme, Tokyo, Japan, Raju John represents India The Overseas Human Resources and Industry Development Association (HIDA) is an organization for human resources development in developing countries to promote technical cooperation through training, experts dispatch and other programs. Through those programs, HIDA aims at contributing to the mutual economic growth of developing countries and Japan as well as enhancing friendly relations between those countries. HIDA had organised ‘The Refresher Seminar for Former Participants [ERLX]’ in Tokyo, Japan between 8th and 17th November, 2017. Mr. Raju John, Executive Secretary, BAI who had attended the ‘Workshop for Officials of Employers’ Organizations’ held in Kuala Lumpur, Malaysia between 19th and 23rd January 2010* and organised by NIPPON-KEIDANREN International Cooperation Center (NICC) was invited by HIDA for ‘The Refresher Seminar for Former Participants [ERLX]’. A total number of 12 participants were present from Bangladesh, Indonesia, Malaysia, Philippines, Thailand and Vietnam. The programme objectives were : 1) To provide the former participants of NICC short-term

invitation programs or the former participants of HIDA/AOTS Employers’ Organization Cooperation Program with an opportunity of up-dating their knowledge on and deepening understanding of the latest practices of industrial relations and human resource management in Japan through lectures, visit to a company and discussions, thus helping nurturing harmonious industrial relations in their companies/organizations.

2) To follow up the former participants regarding how they have made use of their experience gained in Japan for improving industrial relations and human resource management in their companies/organizations.

3) To disseminate the latest labor and economic information in respective countries of the former participants among

Japanese business persons in the HIDA Interactive Meeting.

4) To learn human resources management for productivity improvement

5) To learn from one another about different perspectives, cultures and industries.

IFAWPCA Mid Term Board Meeting. IFAWPCA Midterm Executive Board Meeting held at Kathmandu, Nepal. During 31st August 2016 to 2nd September, 2016, wherein Mr. Avinash M. Patil, President, BAI Executive Board Member of IFAWPCA represented BAI. For your information at present IFAWPCA has 18 members, apart from BAI, viz.

1. Bangladesh Association of Construction Industry 2. Construction Association of Korea 3. Cambodia Constructors Association 4. Federation of Contractors Associations of Nepal 5. Singapore Contractors Association, Ltd. 6. The Hong Kong Construction Association, Ltd. 7. Indonesia Contractors Association 8. Maldives Association of Construction Industry 9. Master Builders Australia 10. Master Builders Association Malaysia 11. Thai Contractors Association 12. Mongolian National Construction Association 13. National Construction Association of Sri Lanka 14. Registered Master Builders Association, New

Zealand 15. Overseas Construction Association of Japan, Inc. 16. Philippine Constructors Association, Inc. 17. Taiwan General Contractors Association

BAI WEBSITE ‘www.baionline.in’ BAI launched its website ‘www.baionline.in’ at the Managing Committee Meeting at Nashik on 9th August 2008. With the launch of www.baionline.in, BAI too aims at giving its members top-of-the-line service. As of now www.baionline.in offers the following services :

� All circulars meant for BAI Centres and senior functionaries will be hosted.

� Important Judgements, Circulars and Notifications by Government(s) and /or Departments will be hosted.

� Tender information. � Latest Price Index Numbers. � Construction industry related exhibition/trade fair

information. � Information on all publication of BAI and its Centres. � Details of office-bearers of BAI. � Links to important websites i.e. like minded national

& international organisations, Government organisations concerning having dealings with construction industry, service providers, construction companies, etc.

BAI members / visitors can download :

� BAI Constitution (BAI Rules & Regulations) � Membership Application Form � Membership Data Updation Form

BAI members can get their membership number through www.baionline.in. Services to be introduced over a period, include :

� Website based email service to BAI members. � ‘News & Discussion Board’ – news concerning the

construction industry will be hosted and members/visitors can air their opinion on the same.

� ‘Meeting Room’ – akin to the concept of ‘chatting’, senior functionaries can hold meetings via video conferencing.

� Archives of ‘Indian Construction’ and other publications by BAI Centres.

� Total detailed membership database of BAI. ‘Wheeling & Dealing’ – is a platform for BAI members and others for offering machinery to be given on hire or request machinery on hire / offer specialised service or request for specialised service, etc. FINANCE OF THE ASSOCIATION The Headquarter, due to its better financial discipline, was generating surplus for the last 15 years, and the current year also we have a surplus of Rs.94,08,860/-. This is a major achievement, though there was a marked decline in interest income. It is also a fact that, the Trustees are prompt and alert in keeping the Fixed Deposits with Banks which offers the highest return. FUNCTIONS OF BAI HEADQUARTER OFFICE BAI Headquarter and BAI Delhi Office with a staff of 14 members functioning exceptionally well under the control of Executive Secretary, Shri Raju John. MEETINGS During the financial year under report, (Six) Managing Committee and 4 (four) General Council Meetings were held at:

� 1. Delhi on 30th April 2016.

� 2. Nashik on 2th July 2016.

� 3. Kottyam on 18th September 2016.

� 4. Chennai on 6th November 2016.

� 5. Gurgaon on 12th December 2016.

� 6. Kolkata on 4th March 2017.

COMMITTEES: The Managing Committee authorised the President, Shri Lal Chand Sharma to re-constitute the Committees for the year 2016-2017. Accordingly, the following Committees were constituted with its Chairpersons as under: - Name of Committee Chairpersons Central Govt. Dept. and PSU. : Shri Ved Khurana Cement & Bulk Material Purchase : Shri A. Puhazhendi CIDC Co-ordination : Shri Sanjay Tyagi Constitutional Amendment : Shri K. Sriram Contract Conditions : Shri H. S. Pasricha Corporate Membership Development & Communications

: Shri Vilas K. Birari

Goods & Service Tax : Shri Sandesh Mundra Grievances : Dr. Tarro T. Manghnani Housing & Real Estate & Infrastructure Development, ISO, Green Building & Recreation.

: Shri K. Ramanujam

Indian Construction Bulletin : Shri D.L. Desai

(Shankarbhai) Labour Welfare, Provident Fund, ESIC & Labour Cess.

: Shri CH. Ramakotaiah

Legal & Arbitration : Shri Neerav Parmar Mechanisation : Shri V.G.Sakthikumar Membership Development & New Centres.

: Shri Pratap B. Salunkhe

MES : Shri Varinder Kumar Garg MSME : Shri Saumil A. Patel National Highways : Shri B. Seenaiah Public Relations : Shri R. K. Jain Railways : Shri K. Venkatesan Skill Development : Shri Neelakanth S. Joshi Taxation, Royalty, Entry Tax, Direct Tax & Indirect Tax.

: Shri K. Viswanathan

BAI Spokesperson : Shri Ram M. Bhatia

BAI MEMBERSHIP/AFFILIATIONS

• Affiliated to International Federation of Asian & Western Pacific Contractors’ Associations (IFAWPCA).

• Founder Member of Construction Industry Development Council (CIDC), New Delhi.

• Member of Indian Merchants’ Chamber, Mumbai.

• Member of Indian Council of Arbitration, New Delhi.

• Member of Employers’ Federation of India, Mumbai.

• Member of Indian Roads Congress.

• Member of Federation of Indian Chambers of Commerce & Industry, New Delhi.

• Member and Promoter of Construction Skill Development Council of India (CSDCI), New Delhi.

BAI’S REPRESENTATIVES ON VARIOUS COMMITTEES

• Shri Avinash M. Patil as Member, Board of Governors of National Institute of Construction Management & Research.

• Shri Avinash M. Patil as Member, Board of Governors of Construction Industry Development Council (CIDC).

• Shri Avinash M. Patil, Member, Board of Governors of National Academy of Construction (NAC).

• Shri B. Seenaiah, Member, Review Committee for Contract Management System formed by Ministry of Statistics & Programme Implementation (MOSPI).

• Shri Avinash M. Patil, Member, National Council of Construction Federation of India (CFI).

• Shri Avinash M. Patil in the focus group formed for WTO. `

• Shri Sushanta Kumar Basu represent BAI on the Working Group of Construction constituted by Planning Commission for the 12th Five year Plan (2012-17).

• Shri Mahesh M. Mudda as Board Member on the Executive Board of IFAWPCA.

• Shri Mahesh M. Mudda on the Expert Committee and Shri Neerav Parmar on the State Level Advisory Committee of Building & Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996 for Government of Maharashtra.

• Dr. Anand J. Gupta on Central Advisory Committee constituted by the Ministry of Labour, Government of India, under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996.

• Shri H.S. Pasricha, Member, Central Advisory Contract

Labour Board, Ministry of Labour, Government of India.

OFFICES OF BAI CENTRES There has been a growing trend amongst BAI Centres to go in for their own office premises, with facilities for conducting meetings, training, etc. The premises owned by these Centres are registered under the name of “Trustees Builders’ Association of India”. As on date, the Centres who have their own office premises are Andhra Pradesh (Hyderabad), Delhi, Eastern (Kolkata), Karnataka (Bangalore), Nanded, Nashik, Pune, Rajasthan (Jaipur), Sangli and Southern (Chennai). ‘INDIAN CONSTRUCTION’ Journal Shri D.L. Desai (Shankarbhai) was the Chairman, Indian Construction Journal Committee for 2016-2017. The printing of the magazine has been continued with a marked change and your journal is becoming more and more popular. The journal has admittedly established a numero-uno position in construction related trade magazines as is evident from non-member subscribers, which includes, Engineering Institutes, Government Departments and Undertakings including many Works Authorities. The Association is also sending around 1000 complimentary copies to like-minded organisations in the country and abroad, Government Authorities, Engineering Colleges, Department Heads, Works Authorities etc. The rising paper, printing and postal costs coupled with low advertisement revenue forces BAI General Fund to cross subsidise the publication as it is not self sufficient. BAI MEMBERSHIP SUBSCRIPTION. The subscription for various categories of membership with the Association were as follows :- Annual Membership Annual Subscription

Rs.2,640

Entrance Fee Rs. 100 ‘INDIAN CONSTRUCTION’ Rs. 200 Service Tax Rs. 411

Total Rs.3,351 Patron Membership One time subscription – Membership for 20 (Twenty) years. Rs.25,000

‘INDIAN CONSTRUCTION’ Rs. 200 Service Tax

Rs. 3,750

Total Rs.28,950

Affiliated Association Membership Annual Subscription

Rs. 4,840

Entrance Fee Rs. 500 ‘INDIAN CONSTRUCTION’ Rs. 200 Service Tax Rs. 801

Total Rs. 6,3411 Affiliated Association – Patron Membership Membership (One time subscription)

Rs.30,000

‘INDIAN CONSTRUCTION’ Rs. 200 Service Tax

Rs. 4,500

Total Rs.34,550

Corporate Membership Memberships (One time subscription) Rs.3,00,000

Annual Subscription Rs. 10,000

Service Tax Rs. 46,500

Total Rs.3,56,500

NEW CENTRES. For the year 2016-17, BAI opened Centres in Gurgaon and Karnal in Haryana State, Delhi East (Shahdara), Delhi North, Delhi South and Delhi West in Delhi State, Kallakurichi, Perambalur, Ponneri, Thiruthuraipoondi in Tamilnadu State, Hassan in Karnataka State, Vizag Steel City in Andhra Pradesh. 2016-17 was an eventful year for BAI as far as growth of the BAI movement is concerned. BAI now planning to open new BAI Centres at Punjab and Orissa. MEMBERSHIP STRENGTH As on 31st March 2017, the membership was16,950, which included 12,780 Patron Members and 4,170Annual Members BUILDERS’ DAY 2016. The theme for the ‘Builders’ Day 2016” was “VISION 2020 –

SKILL INDIA TO BUILD INDIA”. Builders’ Day was celebrated by almost all Centres in a befitting manner.

OBITUARIES : Mr. M. Karthikeyan – A Leading light of BAI fades away & Mr. A. S. Chinnaswamy Raju – A guding light of BAI fades away. BAI lost the following Past President and Trsutee 1. MR. M. KARTHIKEYAN, TRUSTEE AND PAST PRESIDENT

OF BAI EXPIRED ON 3RD JANUARY, 2017.

Mr. M. Karthikeyan was President of BAI during 1992-93. Born on 27th March, 1939 in a village in Coimbatore District, he Graduated in Civil Engineering in the year 1961 through Coimbatore Institute of Technology, Coimbatore. He was an outstanding student and was also actively engaged as Students’ Secretary in college days. Not satisfied with mere Engineering qualification, he did his Postgraduate in Management Studies ‘MBA’ at Madras University in the year 1976. He is a fellow member of the Institution of Engineers also. He worked as Junior Engineer in Highways Department for a period of eighteen months and then along with his uncle and godfather of the family, Mr. P. K. Natarajan formed a Company in 1962 under the name and style of M/s P. K. Natarajan & Co. Under his direct control, he executed many multistoreyed buildings for Telephone Exchanges at Madras and at other places, besides Offices, Star hotels, Stadia, Super markets, Bus stands, Colleges, Housing complexes, Factory buildings, etc., at Coimbatore, Ooty, Rameswaram and other places. Though the works were concentrated on Telecom, CPWD departments, he had experience with departments like MES, State PWD, Highways, ISRO, BHEL, Railways, etc., besides doing works with Architects. He had experience of more than four decades in working with different types of works and also with different departments and clients. Recently he diversified and specialised water proofers and structural repairers and was engaged in Rehabilitation Work. He was also a software engineer and had developed software for accounts and tender modules for builders. M. Karthikeyan was a member of BAI since 1964. He took active interest from 1975 onwards and served the Association in various capacities starting from Executive Committee Member, Hon. Treasurer, Vice Chairman and Chairman of Southern Centre. Thereafter he was State Chairman, Tamil Nadu and then Vice President of the Association. Since he used to attend most of the Managing Committee and General Council Meetings for the past 32 years, he carne in close association with Past Presidents Mr. R. G. Gandhi, Mr. Y. G. Patel, Mr. H. J. Shah, Mr. H. L. Aurora, Mr. M. Nilakantan, Mr. M. N. Rajaraman, Mr. Amarjit Singh Choudhury, Dr. T. N. Subba Rao, Mr. S. A. N. Ranganathachar, Mr. R. Radhakrishnan, Mr. S. R. Kar Roy, Mr. Ajit Gulabchand and Mr. Lalit Sangtani and their teams of Office Bearers.

He attended IFAWPCA Convention at Bangkok in 1984 and at Bombay in 1991. He has attended all the All India Builders’ Conventions starting from 1977 in Madras (1979 Bombay, 1982 Delhi, 1985 Calcutta, 1987 Bangalore, 1989 Hyderabad, 1991 Pune) and was Co-Convenor, Convenor and Co-Convenor respectively for the last three Conventions. From the day Sales Tax on works contract was imposed, he took the lead to fight out the case in High Courts and Supreme Courts as the Chairman of Sales Tax Committee of Tamil Nadu and then as the Sales Tax Committee Chairman of BAI all over India and it was during his term that the Supreme Court gave a historical judgement that the Sales Tax on works contract cannot be levied on total value of works and that it can be levied only on goods transferred into the construction works. He has also served on various Committees like, Contract Conditions Committee, Bulletin Committee, and helped in compiling the Standard Contract Conditions Documents. He has also served as a Member on Provident Fund and Labour Laws and Publications Committees. He was instrumental in mooting the idea of celebrating Builders’ Day and made it an annual feature of the association. He was elected as a Trustee of BAI for the term 2016-19.

2. Mr. A. S. Chinnaswamy Raju, Past President and Past President of BAI expired on 31st March, 2017. Mr. A. S. Chinnaswamy Raju was President of BAI during 1996-97. He was born in 1931, and was involved in construction activity since teenage years and over the years had done works for various Government bodies like MES, PWD, Public Sector Undertakings, etc. These works ranged from factories, living quarters, runways, hospitals cricket stadia etc., mostly in Karnataka and during 1965-1971, in Hyderabad. Diversification in late 70s, brought him in building material factories such as spun concrete pipes, flooring tiles, etc. besides hoteliering in which now managed three major hotels in Bengaluru, viz., The Atria, Hotel Chalukya and Hotel Kanishka, of which, he was the Chairman and Managing Director. In addition to his own business activities, he was actively involved in social life. He was presently the President of the Karnataka State Contractors’ Association for over a decade and the Association had a number of achievements during his tenure. He had been instrumental along with his colleagues in setting up a Contractors’ Credit Cooperative Society to service the financial needs of the small contractors. This has now grown into a multi-branch operation all over the State. Similarly in order to address the recreational needs of member Contractors, he had been instrumental in obtaining land and starting a club ‘Karnataka Contractors’ Club’ in the sylvan surroundings of the Banglore Palace.

Mr. Chinnaswamy Raju was also been the architect behind starting ‘Centre for Awareness in Construction and Engineering – CACE’ at Banaglore to train construction workers, supervisors, small contractors, in the correct use of products, tools, productivity etc. Recognising the work done by the Centre, an organisation of Netherlands ‘BOUWBERRAD’ came forward to extend financial assistance. With the help of some of his close associates and eminent industrialists, Mr. Chinnaswamy Raju formed a Financial Institution known as ‘Plus Finance Ltd.’, the main object of which was to acquire a wide range of assets like movable Plant and Machinery, Balancing equipment, Air Conditioning systems, Medical equipments, etc. through Lease Finance/Hire Purchase Finance. The latest area of diversification for the group under the stewardship of Mr. Chinnaswamy Raju, has been the infrastructure sector. This includes large-scale housing townships and power generation. In the area of housing, I Atria Holdings’ is in the process of building over 7 million sq.ft. of space over the next 5 years. In the area of power generation the group envisages putting up power projects to generate 200 MW of power. Mr. Chinnaswamy Raju has been associated with the Builders’ Association of India from 1986, as one of its Managing Committee members and was one of the Vice Presidents for an 18-month terms in 1991-93. In addition, he was associated with a number of other socially active organisations and educational institutions. He was elected as the President of BAI for 1996-97 and as a Trustee for the period 1999-2004. The All India Builders’ Convention was held in January 1997, during his Presidentship, when then Honourable Prime Minister Mr. Deve Gowda was the Chief Guest. Tamilnadu State Chief Minister Hon’ble Dr. M. Karunanithi and many State and Central Ministers participated in the convention. An exhibition was also simultaneously conducted.

Mr. A. S. Chinnaswamy Raju was to be seen at events of BAI Karnataka (Bangalore) Centre, he attended most of the Managing Committee and General Council meetings held across India. He was always available to BAI for guidance. The Association lost the following members who left for their heavenly abode. BAI in their death has lost sincere and hardworking members.

• Shri K. Sudarshan Reddy, Past State Chairman, Andhra Pradesh, expired on 28th February 2016.

• Shri Shitul Patel, Past Executive Committee Member of BAI Mumbai Centre, expired on 5th March 2016.

• Shri M. Krishnamurthy, Past Vice President, BAI, expired on 11th June 2016.

• Shri K.P. Pradeep, Member of BAI and MD & Editor of ‘Masterbuilder’ Magazine, expired on 11th June 2016.

• Shri K.B. Gurha from Korba (Chattisgarh), a regular contributor of articles to ‘Indian Construction’ journal, expired on 6th March 2016.

• Shri Damodar Narayan Bhobe, Patron Member of BAI Mumbai Centre, expired on 26th July 2016.

• Shri Kumar Vaswani, Past Chairman, BAI Pune Centre, expired on 20th August 2016.

• Shri Simon Mathai, Patron Member of BAI Muvattupuzha Centre, expired on 1st September 2016.

• Shri M. Jayakumar, General Council Member from BAI Mayiladuthurai Centre expired on 20th September 2016.

• Shri Subir Kumar Choudhury, Past Hon. Gen. Secretary; Past Chairman, BAI Mumbai Centre and Founder, ‘Mumbai Construction’ – News Bulletin of BAI Mumbai Centre and former Sheriff of Mumbai, expired on 14th November 2016.

• Shri R. Raman, Past Chairman, BAI Southern (Chennai) Centre, expired on 2nd December 2016.

• Shri M.R.N. Murthy, Past Vice President of BAI, expired on 5th December 2016.

• Shri Atul Raval, Past Chairman of BAI Gujarat (Ahmedabad) Centre, expired on 1st February 2017.

• Shri Harkant Vachharajani, Past Chairman of BAI Gujarat (Ahmedabad) Centre, expired on 8th March 2017.

ATTENDANCE SHEET FORMING PART OF ANNUAL REPORT FOR THE YEAR 2016-17 ATTENDANCE (OUT OF SIX MEETINGS)

Name Attendance Name Attendance

Shri Avinash M. Patil, President 6 Shri Naresh Kumar Agarwal 4

Shri Mu. Moahan, Vice President 6 Shri Narendra Kumar 3

Dr. Rajiv B. Krishnani, Vice President 6 Shri Neelkanth S. Joshi 2

Shri Ravindra Pradhan, Vice President 3 Shri O.K. Selvaraj 3

Shri R.N. Gupta, Vice Presidents 6 Shri P.P. John 2

Shri C.G. Deochake, Hon. Gen. Secretary 6 Shri P. Parameswaran 6

Shri Neerav Parmar, Hon. Gen. Treasurer 6 Shri Prabir Kumar Mukherjee 4

Shri Lal Chand Sharma, Imm. Past President & Trustee

5 Shri Pratap B. Salunkhe 2

Shri Prince Joseph 3

State Chairmen / State Co-ordinators Shri R. Ethirajan 5

Shri Alok Shivhare (Chhattisgarh) 2 Shri R. Krishnawamy 5

Shri B. Sugunakar Rao (Telangana) 6 Shri S. Ayyanathan 3

Shri CH Ramakotaiah (Andhra Pradesh) 4 Shri Sanjay Laxman Patil 1

Shri Devendra Tiwary (Jharkhand) 1 Shri S. Ganapathi 5

Shri John Paul K. (Kerala) 6 Shri Srinivasa Reddy 3

Shri K.S. Someshwara Reddy(Karnataka) 5 Shri S. Prakash 3

Shri Kulesh Goswami (Assam) 1 Shri S. Ramaprabhu 5

Shri M. Thirusangu (Tamil Nadu) 5 Shri T.V. Chandrasekaran 4

Shri Nitin M. Shah (Gujarat) 3 Dr. Tarro T. Manghnani 6

Shri Ravi Kumar Kheria (Rajasthan) 2 Shri Y. Ishwar Rao 1

Shri Sanjay Tyagi (Uttar Pradesh) 1

Shri Sudip Kumar Dutta (West Bengal) 3 Representatives of Affiliated Association Members Shri Suresh B. Patil (Maharashtra) 6 Shri Atul Vijaykant Moog 0

Shri Suresh Vaswani (Madhya Pradesh) 2 Shri E. Manohar 2

Shri N. Velayutham 2

Members of the Managing Committee Shri R.R. Shridhar 3

Shri Abhay M. Garde 1

Shri A. Chamaraja Reddy 3 Past President Shri Amar Bawa 2 Shri B.N. Dikshit 2

Shri A. Puhazhendi 5 Shri H.S. Dugal 0

Shri Ashok Agarwal 2 Dr. Brahm Datt 1

Shri Baburao L. Shakkarwar 1 Shri Shriprakash Goel 4

Shri Basavaraj S. Totad 3 Shri A.S. Chinnaswami Raju 1

Shri Bhopinder Lal 5 Shri V. Ramachandran 4

Shri D. Kempanna 3 Shri R. Radhakrishnan 6

Dr. Dharmesh C. Awasthi 3 Shri M. Karthikeyan 4

Dr. D. Thukkaram 5 Shri A.K. Yussouf 2

Shri G. Thilagar 2 Shri P.R. Mundle 0

Shri Harshad N. Bhayani 2 Shri Ajit Gulabchand 0

Shri H.N. Vijaya Raghava Reddy 5 Shri S.A. Vichare 0

Shri Jaiprakash Bhatia 5 Shri Lalit Sangtani 0

Shri Jawahar Mutha 1 Shri Bhagwan J. Deokar 4

Shri Jagdish M. Parekh 2 Shri Cherian Varkey 1

Shri K. Annamalai 5 Shri B. Seenaiah 2

Shri K.J. George 1 Shri S.K. Basu 5

Shri K. Mathiyalagan 3

Shri K. Ramanujam 4 Members co-opted to Managing Committee Shri K. Subramani 5 Shri J.R. Sethuramalingam 3

Shri L. Shantakumar 4 Shri N.M. Patel 5

Shri L. Venkatesan 4 Shri V.M. Fazal Ali 4

Shri Mahesh R. Mirani 4 Shri Vinod C. Gamdiwala 5

Shri Mathew Alex Vellapally 4

Shri M. Dhandavakrishnan 2 Special Invitees Shri M.G. Sundar 3 Shri A.K. Srivastava 1

Shri Mohan S. Kataria 3 Shri A.N. Balaji 1

Shri Mohinder Rijhwani 3 Shri Anthony Rathnam 1

Shri Mohan D. Bhate 3 Shri Arvindbhai V. Patel 0

Shri N. Ramalingam 0 Shri B. Adinarayana Reddy 1

Shri Narendra P. Patel 2 Shri B. Babu Rao 1

Special Invitees Trustees

Shri C.S. Parhar 2 Shri Ashok K. Choudhary 2

Shri D.P. Balaji 1 Shri D.L. Desai (Shankarbhai) 3

Shri G.M. Ravindra 1 Shri M. Karthikeyan 4

Shri H.V. Nagesh 1 Shri N. Sachitanand Reddy 5

Shri Harkant G. Vachharajani 0 Shri R. Subburaman 3

Shri I. Nepolian 1 Shri Vijay Jagannath Devi 4

Shri J. Dhanasekar 0 Shri Lal Chand Sharma 5

Shri Jacob Mathew Vellapally 1

Shri Jaideep P. Raje 0

Shri Joshy Joseph 3

Shri K. Chinnaswamy 2

Shri K. Rajakumaran Nair 1

Shri K. Rajavel 2

Shri L.D. Kotwani 1

Shri M. Rajendran 1

Shri Mahesh G. Mahajan 2

Shri Manesh K. 1

Shri Milind T. Patil 1

Shri MVG Jawagar 1

Shri N.M. Krishnamurthy 1

Shri N.P. Vishwanath 2

Shri P. Shahin 0

Shri P.K.P. Narayanan 2

Shri Paresh Vachhani 0

Shri Praksh N. Dewalkar 1

Shri Pratap S. Rananaware 0

Shri R. Manohar 1

Shri R. Saravanan 2

Shri R. Sivakumar 4

Shri Rahul B. Vakharia 0

Shri Rajendra K. Mutha 2

Shri Rajendra M. Upadhye 0

Shri Ramdas R. Jagtap 1

Shri Ramesh P. Marda 0

Shri S. Pandiyen 2

Shri S.M. Sait 0

Shri S.R. Swamy 1

Shri Sanjay Shah 1

Shri Sharad D. Kharade (Patil) 1

Shri Stanley Scaria 1

Shri Sunil Kokitkar 1

Shri Suresh Moorjani 3

Shri Tarak R. Mamlatdarna 1

Shri Uday N. Gokhale 1

Shri V. Narasimhan 3

Shri V. Sivarajan 3

Shri V.L. Muniraja 1

Shri Vinit Patel 0

Chairpersons of Committees

Shri H.S. Pasricha 0

Shri K. Sriram 4

Shri K. Venkatesan 6

Shri K. Viswanathan 4

Shri R.K. Jain 0

Shri Saumil A. Patel 0

Shri Sandesh Mundra 1

Shri Varinder Kumar Garge 0

Shri Ved Khurana 2

Shri V.G. Sakthikumar 3

Shri Vilas K. Birari 4

Name Attendance Name Attendance

BAI Centres Chairmen Shri K.K. Abraham (Changanacherry) 2

Shri N.K. Thakur (Patna) 2 Shri V.S. Jayachandran (Kerala Trivandrum)

2

Shri Ran Vijay Pradhan (Jharkhand Ranchi) 0 Shri Manoj Mathew (Kochi Cochin) 2

Shri Shiv Kumar Burman (Jamshedpur) 0 Shri K.M. Abdul Jabhar (Kodungallur) 0

Shri Surojit Samanta (Eastern Kolkata) 2 Shri Jose Thomas (Kollam) 2

Shri Awadh Kishore Mishra (Durgapur) 1 Shri Santy V. Mathew (Kottayam) 5

Shri Ranjit Kumar Debnath (Haldia) 1 Shri Sabu Thomas (Muvattupuzha) 3

Shri Sanjib Goyal (Guwahati) 1 Shri Jose Valothil (Thripunithura) 1

Shri Pinak Pani Nath (Silchar) 1 Shri Navas Attinkara (Thiruvalla) 1

Shri Ram Avtar (Delhi) 4 Dr. C.R. Ramdas (Thrissur) 1

Shri Nand Kishor Goyal (Rajasthan Jaipur) 1 Shri S. Balaji (Chengalpattu) 3

Shri Kishor Singh Parihar (Jaisalmer) 0 Shri S.M. Bakiaraj (Chettinadu) 1

Shri Anil Bhawnani (Jodhpur) 0 Shri R. Karana Boopathy (Coimbatore) 4

Shri Rajeev Khattar (Agra) 0 Shri M. Veeramarban (Dindigul) 2

Shri Manoj Sharma (Agra Cant.) 0 Shri R. R. Sathiamurthi (Erode) 1

Shri Ashok Kumaar Sharma (Aligarh) 3 Shri R. Govindan (Kanyakumari) 0

Shri Harish Chandra Agrawal (Allahabad) 0 Shri B. Murali (Kodaikanal) 1

Shri Arun Kumar Tyagi (Bagpat) 1 Shri R. Venkatesan (Kumbakonam) 3

Shri Praveet Chaudhary (Bareilly) 1 Shri M. Selvakumar (Madurai) 2

Shri Satish Kasana (Gautam Budh Nagar) 1 Shri P. Satheesh Kumar (Maduranthagam) 0

Shri Dinesh Sharma (Ghaziabad) 2 Shri S. Chandrasekaran (Mayiladuthurai) 2

Shri Ravinder Nagar (Greater Noida) 1 Shri A. Moorthy (Nagapatnam) 0

Shri Rajeev Agarwal (Hapur) 4 Shri K. Mani (Namakkal) 2

Shri Vikas Agarwal (Kanpur – South) 0 Shri V. Loganathan (Neyveli) 2

Shri Yoginder Kasana (Loni) 1 Smt. P. Punithavathi (Nilgiri) 0

Shri Harjeet Singh (Lucknow) 1 Shri M. Murugesan (Pudukkottai) 1

Shri Sudhir Tyagi (Meerut) 1 Shri S. Mohan (Salem) 2

Shri Vijay Kumar Bansal (Meerut Cantt.) 1 Shri K. Venkatesan (Southern Chennai) 6

Shri Vipin Kumar Sirohi (Modi Nagar) 0 Shri B. Anandhan (Thanjavur) 3

Shri Vipin Kumar (Moradabad) 0 Shri Sivakumar E.S. (Theni) 0

Shri Manbir Tyagi (Moradabad Northern Rly.) 1 Shri L. Sundaram (Tiruvannamalai) 1

Shri Rajiv Tyagi (Muzaffarnagar) 1 Shri J. Sankaran (Tiruchirappalli) 2

Shri Jai Kumar Agarwal (Sitapur) 1 Shri A. Kumar (Tirupur) 1

Shri M. Sri Hari (Nellore) 1 Shri M. Olaganatha Sankar (Tirunelveli) 1

Shri N. Srinivasa Reddy (Ravulapalem) 3 Shri K.J. Jayasrinivasan (Thiruvallur) 0

Shri V. Venkateswara Rao (Vijayawada) 1 Shri Haribalakrishnan (Tuticorin) 0

Shri G.V. Ravi Raju (Visakhapatnam) 0 Shri C. Sridhar (Vellore) 0

Shri V. Gangadhar (Adilabad) 1 Shri Surendra K. Prahladka (Andaman & Nicobar)

1

Shri V. Ravinder Reddy (Greater Hyderabad) 4 Shri L. Carttigueane (Puducherry) 3

Shri P. Narasimha Rao (Hyderabad) 5 Shri N. Anbazhagan (Karaikal) 2

Shri U. Surender (Karimnagar) 2 Shri Hemant Khanna (Bilaspur) 1

Shri CH Srinivasa Rao (Khammam) 2 Shri Kanwaljeet Singh Oberoi (Durg-Bhilai)

1

Shri S. Venkateswarlu (Medak) 1 Shri Sharda Prasad Singh (Jagdalpur) 2

Shri CH Pavan Reddy (Mahaboobnagar) 3 Shri Kanmal Jain (Kanker) 1

Shri Soma Srinivas Reddy (Nalgonda) 4 Shri K. Chandrasekhar Rao (Raipur) 2

Shri V. Bhaskar Reddy (Nizamabad) 4 Shri Vilas Bhangi (Goa) 0

Shri Ghantasala Balaji (Ranga Reddy) 1 Shri Kalpesh A. Joshi (Vadodara) 2

Shri K. Devender Reddy (Warangal) 3 Shri Rajesh N. Shah (Bharuch) 0

Shri M.K. Anantha Reddy (Chitradurga) 0 Shri Gopal Sing Rathod (Gujarat Ahmedabad)

1

Shri R. Ambika Pathy (Karnataka Benglore) 2 Shri Smit Kaneria (Rajkot) 0

Shri N. Subramanya (Mysore) 3 Shri Bhuwan Giri Goswami (Surat) 2

Shri Inani Purushottam (Raichur) 0 Shri Ramesh Nathani (Bhopal) 2

Shri H.R. Shashidhar Naik (Shimoga) 3 Shri Arun Kumar Jain (Indore) 0

Shri Rajeev Warrier (Alleppey) 1 Shri Sanjeev Garg (Jabalpur) 0

Shri V.S. Mytheen (Aluva) 2 Shri Dilip B. Jagtap (Ahmednagar) 2

Shri K.A. Johnson (Angamaly) 3 Shri Pradeep R. Chadha (Amravati) 1

Shri Girish Manapure (Butibori Nagpur) 0 Shri Rajendra Kharade (Baramati) 3

Shri Rajendra Bhupal Khanderajure (Ichalkaranji)

2 Shri Sanjay S. Desale (Dhule) 3

Shri Pratap Krishant Kondekar (Kolhapur) 2 Shri Anil Bhaidas Patil (Jalgaon) 2

Shri Mahendra P. Patil (Malegaon) 1 Shri Suresh Ramrao Pensalwar (Latur) 0

Shri Raja Dronkar (Nagpur) 1 Shri Pradeep Nagawekar (Mumbai) 5

Shri Rameshwar Malani (Nashik) 6 Shri Manoj More (Nanded) 1

Shri Nimbalkar Pramod Subhashrao (Phaltan) 1 Shri Ashok R. Jethwani (Parbhani) 0

Shri Jayant P. Patankar (Sangli) 1 Shri Siddharth Shah (Pune) 3

Shri Mangesh Arun Jadhav (Satara) 1 Shri Kisan Keshavrao Thorat (Sangamner) 0

Shri Prakash Hotchand Menda (Ulhasnagar) 6 Shri Rajesh B. Deshmukh (Solapur) 1

Shri M.K. Ashik (Calicut) 1

Note: Discrepancy, if any, may kindly be informed to the Head Quarter Secretariat on or before 30th

June 2017.

Team 2017-18

President Mr. H. N. Vijaya Raghava Reddy

Vice Presidents Mr. L. D. Kotwani Mr. R. N. Gupta Mr. S. Narasimha Reddy Mr. Sachin Chandra

Mr. V. N. Varadharajan Hon. Gen. Secretary Hon. Gen. Treasurer Mr. C. G. Deochake Mr. Neerav Parmar

Imm. Past President Avinash M. Patil

State Chairman – Andhra Pradesh Mr. P. Raja Babu State Chairman – Chattisgarh Mr. Alok Shivhare State Chairman - Gujarat State Chairman - Jharkhand Mr. Pankaj N. Saraiya Mr. Chandrakant K. Raipat State Chairman - Karnataka State Chairman - Kerala Mr. S. R. Swamy Mr. V. Santosh Babu State Chairman - Maharashtra State Chairman - Tamil Nadu Mr. Rajendra S. Athawale Mr. G. Ved Anand State Chairman - Telangana State Chairman - Uttar Pradesh Mr. B. Sugunakar Rao Mr. Ravindra Tyagi State Co-ordinator - Assam State Chairman – Delhi Mr. Sanjib Goel Mr. Ram Avtar State Co-ordinator - Haryana State Co-ordinator - Madhya Pradesh Mr. Rajiv Goel Dr. Santosh Katiyar State Co-ordinator - Puducherry State Co-ordinator - Rajasthan Mr. L. Carttigueane Mr. Pradeep Kumar Jain

State Co-ordinator - West Bengal Mr. Ashok Kumar Chandak

Members of the Managing Committee representing Centres

Mr. Anilbhai R. Zinzuwadia Mr. Ashok Agarwal Mr. Baburao L. Shakkarwar Mr. Bhopinder Lal Mr. D. R. Sekar Mr. D. V. N. Reddy Mr. G. Diwakar Mr. G. Thilagar Mr. Jaiprakash Bhatia Mr. K. Annamalai Mr. K. Subramani Mr. M. Dhandavakrishnan Mr. M. Thirusangu Mr. Mathew Alex Vellapally Mr. Mohan S. Kataria Mr. N. Ramalingam Mr. N. Shanmugam Mr. N. S. Muralidhara Mr. Prabir Kumar Mukherjee Mr. Prakash H. Menda Mr. Prince Joseph Mr. S. Ramaprabhu Mr. S. I. Chunkhare Mr. S. S. Natarajan Mr. Suresh B. Patil Mr. T. V. Chandrasekaran Mr. V. Satya Murthy Mr. V. Srinivasa Murthy

Members of the Managing Committee representing Patron Members

Mr. A. Chamaraja Reddy Mr. Alex P. Cyriac Mr. Basavaraj S. Totad Mr. Bhojraj Vithalrao Naik Nimbalkar Dr. Dharmesh C. Awasthi Mr. John Paul K. Mr. K. Viswanathan Mr. K. J. George Mr. L. Shanthakumar

Mr. L. Venkatesan Mr. Mahesh M. Mudda Mr. Mu. Moahan Mr. N. M. Patel Mr. Narendra Kumar Mr. P. Narasimha Rao Mr. P. P. John Mr. P. Subramani Mr. Paul T. Mathew Dr. Rajiv B. Krishnani Mr. Ravindra Pradhan Mr. S. Ayyanathan Mr. S. Ganapathi Mr. S. D. Kannan Dr. Tarro T. Manghnani Mr. V. Ravinder Reddy

Members of the Managing Committee representing Affiliated Associations

Mr. Arvind V. Patel Mr. G.M. Ravindra Mr. R. Manoharan Mr. S. Pandiyen

Co-Opted Members

Mr. V.M. Fazal Ali Dr. D. Thukkaram Mr. M. Munireddy

Specail Invitees

Mr A.S. Gandhi Mr A.V. Sridhar Mr Abhay Garde Mr Anthony Rathnam Mr B. Anandhan Mr B. Ramesh Mr C.K.S. Panicker Mr C.N. Raja Mr Dinesh K. Patel Mr E. Keerthinathan Mr Girish Manapure Mr Girish Shah Mr Jagdish M. Parekh Mr Joshy Joseph Mr K. Selva Durai Mr K. Selvaraj Mr K.K. Raghavan Mr M. Aravinth Mr M. Baldwin Bruce Mr M. Rajendran Mr M.S. Ramprasad Mr Mahesh R. Mirani Mr Mahesh Verma Mr Mohan D. Bhate Mr Najeeb Mannel Mr P. Palani Mr P. Senthil Nathan Mr P.K. Ramachandran Mr P.M. Harshe Mr Prakash N. Dewalkar Mr R. Dharmalingam Mr R. Joseph Arputha Alex Mr R. Krishnaswamy Mr R. Mouraly Mr R. Srinivasan Mr Rajendra M. Upadhye Mr Rajendra Mulchand Gothi Mr Ramesh Marda Mr S. Balaji Mr S. Wilfred Mr Sukumar F. Chougule Mr Surendra K. Prahladka Mr Suresh Moorjani Mr T.V. Ramakrishnan Mr Tarak R. Mamlatdarna Mr U.M. Gurushanthappa Mr Uday N. Gokhale Mr Upendra J. Barot Mr V. Govthaman Mr V. Sivarajan Mr V.S.K. Moorthy Mr Vinod C. Gamdiwala

Builders’ Association of India

(All India Association of Engineering Construction Contractors & Builders)

FUNCTIONING CENTRES

ANDHRA PRADESH STATE Jharkhand (Ranchi) Pune TELAGANA STATE Nellore Sangli Adilabad Rajahmundry KARNATAKA STATE Satara Greater Hyderabad Ravulapalem Karnataka (Bangalore) Solapur Hyderabad Tanuku Chitradurga Ulhasnagar Kamareddy Vijaywada Hasan* Wai Karimnagar Visakhapatnam Mysore Khammam Vizag Steel City* Raichur RAJASTHAN STATE Mahaboobnagar Shimoga Jaisalmer Medak ASSAM STATE Jodhpur Nalgonda Guwahati KERALA STATE Rajasthan (Jaipur) Nizamabad Silchar Alleppey Udaipur Ranga Reddy Tezpur Aluva Warangal Angamalli TAMIL NADU STATE BIHAR STATE Calicut Chengalpet UTTAR PRADESH STATE Patna Changanacherry Chettinadu Agra Kerala (Thiruvananthapuram) Coimbatore Agra Cantt. CHATTISGARH STATE Kochi Dindigul Aligarh Bilaspur Kodungugallur Erode Allahabad Durg-Bhillai Kollam Kallakurichi* Baghpat Jagdalpur Kottayam Kanyakumari Bareilly Kanker Muvattupuzha Kodaikanal Gautam Budha Nagar Raipur North Malabar (Kannur) Kumbakonam Ghaziabad Thripunithura Madurai Greater Noida DELHI STATE Thrissur Madhuranthakam Hapur Delhi Thiruvalla Mayiladuthurai Loni Delhi East Shahadara* Nagapattnam Lucknow Delhi North* MADHYA PRADESH STATE Namakkal Meerut Delhi South* Bhopal Nilgiri Meerut Cannt. Delhi West* Indore Neyveli Modinagar Jabalpur Perambalur* Moradabad GOA STATE Ponneri* Moradabad Northern Railway Goa MAHARASHTRA STATE Pudukkottai Muzaffarnagr Ahmednagar Salem Sitapur GUJARAT STATE Amravati Southern (Chennai) Kanpur Baroda Baramati Thanjavur Kanpur-South Bharuch Butibori Thenni Gujarat (Ahmedabad) Dhule Thiruthuraipoondi* UNION TERRITORIES Rajkot Ichalkaranji Thiruvannamalai Andaman & Nicobar Surat Jalgaon Tiruchirapalli Karaikal Kolhapur Tirunelveli Pondicherry HARYANA STATE Malegaon Tirupur Gurgaon Mumbai Tiruvallur WEST BENGAL STATE Karnal Nagpur Tuticorin Durgapur Nanded Vellore Eastern Centre (Kolkata) JHARKHAND STATE Nashik Haldia

Hazaribagh Nandurbar *Opened during the Jamshedpur Phalatan year 2016-17.

AFFILIATED ASSOCIATIONS

• All Kerla Government Contractors Association

• Amravati District Contractors’ Association, Amravati

• Association of Builders for Chennai Development

• Chennai Flat Promoters’ Association - North

• Chennai Suburban Builders Association

• Confedeartion of Real Estate Developers Association of India (CREDAI), Karnataka

• Contractors and Builders Association of Vidarbha

• CPWD Civil Contractor Association

• Earthmoving Contractors & Machinery Owners Association

• Flat Promoters Association (Ambattur & Avadi)

• Flat Promoters Association- Chennai South

• Gujarat Contractors’ Association, Ahmedabad

• Jharkhand Local Thekedar Sangh, Ranchi

• Kancheepuram Civil Engineers Association (KANCEA)

• Karnataka State Contractors’ Association, Bangalore

• Kerala CPWD Conatractors Association

• Latur District Builders’ Association, Latur

• Mumbai Housing & Area Development Contractors’ Association, Mumbai

• Nagpur Contactors Association

• Pavers Finished Road Builders’ Association, Chennai

• Singara Chennai Builders Association

• Southern Region Petrolum Corporation Contractors Welfare Association

• The Association of Engineering Constractors CMWSS Board • Tamilnadu Fly Ash Bricks & Blocks Manufacturers Association,

Chennai

• Tamil Nadu Solid, Hollow & Paver Blocks Manufactures Association

• The Southern Railway Engineering Contractors Association


Report


ESTD. 1941

Reports from BAI Centres

2016–2017

www.baionline.in

Builders’ Association of India (All India Association of Engineering Construction Contractors & Builders)

s from BAI Centres

BAI Centre’s Report 2016 – 17

Alleppey Centre Members of the Centre, under the leadership of Mr. Jacob John (Chairman – 2014-15) and Mr Money Varghese (Hon Secy 2014-15) had undertaken a project ‘Home for the Homeless’, wherein they constructed houses for the poor. The project was completed in 2016-17 and keys were handed over to deserving poor families. Angamaly Centre Installation of new office Bearers were conducted at Diana Heights Hotel on 26.06.2016. State Chairman Shri John Paul installed Shri Johnson K. A. as Chairman and office bearers. Roji M John MLA was the Chief Guest. Builders Day was conducted on 27.11.2016 with a motivation talk by an International corporate trainer Shri Adv. Kunji Palu. Centre also initiated for giving a home for homeless and work started for a home for Sarojini, a widow having one child. Centre actively interacts with the members and conducted three general body meetings and seven executive meetings. The centre is planning for increasing its strength by another 33% increase that is 60 members.

Baramati Centre Centre celebrated “Engineers Day” on 19th & 20th Sept 2016 alongwith Vidya Pratishthan’s Bajaj Institute of Engineering & Technology (VPKBIET), Baramati. Various competitions were organized for the engineering students and prices were distriputed to the winning students in the presence of Mr Vijay Devi, Trustee-BAI and many other senior members & functionaries of Centre/State and prominent personalities. Bharuch Centre The Centre organised a meeting of fellowship meet for all members of BAI Bharuch Centre conducted to review previous year projects and brainstorming for the next year 2016-17. The Centre organised a P.F. Meeting on 04.06.2016 evening talk on PF all members gathered at SMP House Bharuch and had a talk from PF office Bharuch discussed about compliance and commitment for PF of labours and staff members. The Centre organised Engineers Day Celebration on 15.09.2016, Celebrated Engineers day along with the students of SVNIT Bharuch College. Presentation on today’s and Future of Civil Engineering, students narrated about their subjects and implementation in future technology.

Changanassery Centre

Installation function of the office bearers of the Centre was held on 19th June 2016.

The Centre installed a water cooler at Thrikodithanam Police Station for public use, which was inaugurated by Mr. Ajith Kumar, Dy. S.P. Changanachery and also distributed text books, note books and bags to the students and to the needy pupil of Changanachery Government School. The Centre celebrated ONAM on 18th September 2016. The Centre arranged family meet on 11th October 2016 and 11th January 2017. On 11th January 2017, a technical meet was arranged by the Centre on ‘How to make good cement concrete and mortar’. Builders’ Day was celebrated by the Centre in association with Thiruvalla, Alapuzha and Kottayam Centre. The Centre took the steps to settle the labour issues related with loading and unloading and gave representation to DLO, Kottayam for fixation of rates for loading and unloading in certain items the reconciliation is in progress. Chengalpattu Centre The Centre held’s 12 Executive Meeting for the year 2016-17. On 29.04.2016 Friday Installation Function of CPT Centre Er. S. Balaji, Chairman and his Team of Office Bearers out founder Chairman C. Sathishkumar was installed the New Office Bearers and Chief Guest Chettinad Cement, Vice President, Guest of Honour Principal Dr. T. Sivanesan, Professor, University are Participate the Function. Installation Function Chairman Er. R. Prakash arranged this function grand manner. On 29.07.2016 Fourth EC Meeting held at MM Hotel Kanchipuram Meeting regarding Health Camp Program organized by Apollo Hospital and Educational Donation, New Member Introduction and Issuing Certificate speech in Legal Advisor and Health Insurance Clamp for Workers and Members. On 15.08.2016 Independence Day Celebration Flag Hosting Ceremony at out Office and tree plantation program special speech and arrange the breakfast to our members.

The centre Organised, an event with the State Health Minister Program on 21.09.2016, with our members regarding dengu program in this function honour our Chairman. The Centre also organised, “Skill India to Build India” Builders day Celebration Celebrating on 23.10.2016, in Grand Manner with 500 workers and 300 members arrange free medical camp with Suriya Clinic Kancheepuram Chief Gust motivation speech cine actor Ajay Rathnam given eminent speech and Kancheepuram MLA C.V.M.A. Ezhilarasan, Chief Guest and also attend the function and the give award to Er. P. Ravichandran, Er. S.K. Kuppulingam, Best contribution to the industry. The hole function was arranged grand manner by builders day committee chairman Er. E. Venkatesan and Co. Chairman M.G. Sundar, all the members and workers issuing grand gift.

Cochin (Kochi) Centre The Centre organised a lecture on safety at construction sites by Mr. Josey John, w L&T ECC, Mumbai were conducted jointly with CREDAI on 11th June 2016 at Hotel Downtown. The Centre organised a seminar on GST was held on 28th September 2016 at BAI Chambers by Adv. Jose Jacob, Head, Indirect Taxes and Legal, JB Arsen. The Centre organised lecture on the topic “Vision on Urban Development” by Ar. Iqbal Hibib from Dhaka was organised jointly with Kerala Management Association, CREDAI and IIA on 04th October 2016. A certificate course in construction management for engineering graduates in association with KITCO was given for 15 students. BAI members were also some of the faculties. Builders’ Day was held jointly with Muvattupuzha, Thripunithura and Thrissur Centres on 22nd October 2016 at Hotel Taj Gateway. President, Shri Avinash Patil was the Guest of Honour. Around 350 members attended the function. State Committee and State Convention was hosted by the Centre on 22nd October 2016 and were well attended. Seminars were also held during the State Convention. On “Leadership in Safety” by Mr. Josey John, L&T, ECC, Mumbai and a ‘Discussion in latest labour laws’ by Adv. Jose Jacob, Head, Indirect Taxes and Legal, JB Arsen, which were well appreciated by the members of all Centres. Technical Seminars / Training:

� A Lecture on Safety at construction site were conducted jointly with CREDAI on 11th June 2016.

� A Seminar on GST was held on 28th September 2016.

� A Seminar on ESI / EPF was conducted at BAI Chambers on 27th January 2017.

� The Lecture on the topic ‘Vision on Urban Development’ was organised jointly with Kerala Management Association, CREDAI and IIA on 4th October 2016.

� A Certificate course in Construction Management for Engineering graduates in association with KITCO was given for 15 students. BAI members were also some of the faculties.

The Centre organised a seminar on ESI / PF was conducted at BAI Chambers on 27th January 2017. The Centre added 12 more new Patron Members for the year 2016-17 and the total membership as on 31st March 2017 is 220. During the year, the Centre conducted 12 Executive Committee Meetings.

Coimbatore Centre The Centre Office Bearers were installed on 2.4.2016 by Shri Avinash Patil, BAI, President, A children’s park was opened at Kalveerampalayam by the efforts of our Chairman Mr. R. Karanaboopathy with State Chairman Mr. Thirusangu opening the park. Swami Sugbodhanandha from Bangalore rendered a brilliant and funny speech. This was attended by around 1300 builders and their family members. The Centre organised platinum Jubilee’s valedictory function on 24.11.2016 in a grand manner at hotel Raddison Blue. All the committees under out our Past Chairman Mr. K. Vishwanathan worked brilliantly towards the making the valedictory a grand success. All India Past Chairman Mr. Beeshma R. Radhakrishnan, all India Vice Chairman (South) Mr. M. Mohan, State Chairman Mr. Thirisangu and South Centre Chairman Mr. Venkatesan participated in the valedictory function. The event was sponsored by Renocon, P.R. Redymix, C.M. Doors. There was a detailed coverage about the event in The Hindu Newspaper. The Centre Organised Builders Day and Monthly Meeting on 23.10.2016 was held CODISSIA. Food for the event was sponsored by membership committee Chairman Mr. K. Chinnasamy. Mementos were also provided by past Chairman Mr. K. Chinnasamy. Sweets were provided by executive committee member Mr. Lakshmanan.

Delhi Centre

Centre hosted the First Meeting of the Managing Committee of BAI for the year 2016-17 on Saturday, the 30th April 2016 at India Habitat Centre, New Delhi. Mr. R N Gupta, Vice President and Mr. Ram Avtar, Chairman welcomed the delegates to the meeting and thanked BAI-HQ for hosting the meeting. Centre also arranged for a Welcome Dinner of delegates on Friday, the 29th April 2016. Mr Avinash M Patil, President appreciated the efforts of the centre in arranging the meeting at such a short notice and also for the nice arrangements at the venue of the meeting, dinner and transport arrangements.

On Saturday 8th August, 2016, Delhi Centre in association with Delhi East-Shahdara, Gurgaon and Karnal Centres organised a 'Farewell-cum-Welcome' function for Mr. Diwakar Garg, outgoing DG-CPWD, who retired on 30th July 2016 and for Mr. Abhay Sinha, incoming DG-CPWD, who joined on 1st August 2016. Mr. Mukand Joshi, who also retired as SDG-CPWD on 30th July, 2016 was also given a fond farewell. All the three officers were present along with their better halves. Nearly 33 senior serving officers (Chief Engineer and above) and 14 retired officers, along with their spouses, from CPWD, were invited. BAI was represented by Mr. R. N. Gupta, Vice-President; Mr. Ram Avtar, Chairman, Delhi Centre, Mr. J. P. Aggarwal, Chairman, Delhi East - Shandara Centre, Mr. Rajiv Goel, Chairman, Gurgaon Centre and Mr. Vijay Kumar Gupta, Chairman, Karnal Centre and other senior functionaries from these Centres. In his brief address Mr. Diwakar Garg thanked all BAI members for their support and co-operation during his service with CPWD, particularly as DG in particular. Mr. Abhay Sinha in his address assured his support and co-operation to the BAI members . Al l the other o ff i cers appreciated BAI members and thanked for organsing the event, which gave them an opportunity to meet old stalwarts from their department and also interact with the contractors working for their department. Delhi, Delhi East, Delhi West, Delhi North Centres from Delhi and Gurgaon and Karnal Centre from neighbouring Haryana jointly celebrated "Builders' Day 2016-17' in Delhi on 10th November, 2016. Mr. R. N. Gupta, Vice-President was the Chief Guest for the celebrations. Mr. Ram Avtar, Chairman, Delhi Centre; Shri Rajiv Goel, Chairman, Gurgaon Centre; Shri Jagdish Prasad Agarwal, Chairman, Delhi East Shandara Centre; Mr. Manoj Kumar Singla, Chairman, Delhi West Centre and host of senior functionaries from these Centres were present on the occasion.

Delhi East Centre

Joining the growing trend across India, that of existing BAI Centres sponsoring opening of new

Centres, Delhi Centre created mile stone by by sponsoring Delhi East Centre in Delhi which was formally inaugurated by Mr. Lal Chand Sharma,Imm. Past President and Shri R N Gupta, Vice President on 18th July 2016 in a grand function organized at New Friends Club, Mathura Road, New Delhi. Also present on the occasion were Mr. Ram Avtar, Chairaman, Delhi Centre, Shri Rajiv Goel, Chairman-Gurgaon Centre and other senior members from and host of other members from Delhi Centre. Mr. J P Aggarwa; was formally installed as the first Chairman of BAI - Delhi East Centre. Mr Lal Chand Sharma spoke on the occasion about BAI, appreciated the good efforts put in by Shri R N Gupta, Vice President, Mr Ram Avtar – Chairman and other in opening of the second centre in Delhi Mr. Sharma also distributed Patron Membership Certificate who were present on the inauguration ceremony.

Delhi North Centre Mr R N Gupta, Vice President and Mr Ram Avtar - Chairman Delhi Centre achieved another mile stone of sponsoring and opening of Fifth Centre, in one year, by announcing the opening of Delhi North Centre in Delhi on 11th December 2016. Other centres opened during the year are Gurgaon Centre and Karnal Centre in Haryana, Delhi East Centre and Delhi West Cenatre in Delhi. Though the Centre will become functional from 1st April 2017, all the formalities related to the centre were completed by enrolling the requisite number of patron members and announcing the name of Mr. Sanjeev Bansal as its first Chairman.

Delhi West Centre Delhi West Centre was formally inaugurated by Mr. Avinash Patil, President on 8th September, 2016 in the Conference Room of BAI's Delhi office. Also present on the occasion were Mr. R. N. Gupta, Vice-President, BAI and Mr. Ram Avtar, Chairaman, Delhi Centre and host of other members from Delhi Centre and Delhi West Centre. Mr. Manoj Kumar Singla was formally installed as the first Chairman of BAI, Delhi West Centre. Delhi West is the fourth Centre which has been sponsored and opened in 2016-17 by Delhi Centre. Other centres which have been sponsored and inaugurated by Delhi Centre from April 2016 onwards are Delhi East Centre in Delhi and Gurgaon Centre & Karnal Centre in Haryana. Dhule Centre Instalation function of the office bearers of the Centre was held on 3rd April 2016. Shri Suresh B. Patil, State Chairman, was the Chief Guest. A large number of members were attended the function.

‘Swachhata Abhiyan’ was carried out for 2 Km road length by the Centre, in the presence of Municipal Commissioner, Shri Namdeorao Bhosale, on 20th May 2016. The Centre organised an Awareness Lecture on RERA and MOFA by expert speaker Advocate Dinesh Gaikwad, on 29th July 2016. A large number of members were participated the lecture. On 10th August 2016, Mahamorcha was arranged by the Centre for implementation of New DCR for ‘D’ Class Corporation and various demand regarding regularities in sanctioning process. A Press Conference was also organised. Print and media given good coverage in all leading Newspapers. The Centre organised an Expert Lecture on Demonetisation of Currency and its effect on Real Estate Sector by CA Shri Shriram Deshpande, on 27th November 2016. The Centre organised Lecture on New DCR by Deputy Director, Town Planning, Shri Anant Dhamane, on 22nd December 2016. A large number of members were participated the lecture. The Centre participated in the Trade Fair ‘Rover Buildcon 2017’, a popular exhibition of Dhule City, on 29th December 2016. A lecture was organised by the Centre on Investment Opportunities in Real Estate Sector ‘SPARSH 2017’ on 29th January 2017. Shri Rohit Mishra, Shri Sanjay Desale, Chairman, Dhule Centre, and CA Shriram Deshpande were the Keynote Speakers. The Centre opened two new BAI Centres namely, Shahada and Nandurbar in Maharashtra on 25th March 2017 by the hands of BAI President, Shri Avinash M. Patil. Shri Suresh B. Patil, State Chairman, Maharashtra and Shri Pratap Salunkhe, Chairman, Membership Development & New Centres Committee were present on the occasion. The Centre celebrated Builders’ Day on the same day. The Centre also organised Awareness Programme for Labours at various site locations. During the year, the Centre arranged interactive meeting with various Political and Government officials. Durgapur Centre

The Centre organised 1st meeting held on 27.04.16 at City Residency. The installation Ceremony date was decided on 8th May 2016. The new Chairman is Mr. R. S. Khamboh.

The Centre organised Installation Ceremony was held on 8.05.16 at city residency Durgapur. New committee of 2016/17 chairman Mr. A.K. Mishra and

his team installed by Mr. S.K. Basu past president of BAI chief guest and Mr. Sudip Dutta state chairman was present. Senior member felicitated by centre. The Centre organised Builders Day and Platinum Jubilee on 20.11.2016 of BAI was celebrated. Chief Guest was Mr. S.K. Basu present on that ceremony. The Centre organised AGM and family picnic held on 29.01.17 at Anand Amusement Park, city centre. On that day new committee members were elected for 2017-18. Chairman Mr. Ajit Singh Alag and others. 7 members of Durgapur were present at GC & MC meeting at Chennai, Mysore & Kolkata. Durgapur centre arranged many seminar and meeting for Service Tax and others issues for awareness. 93 members are now in BAI Durgapur centre. Durgapur Centre member, Mr. A.K. Chandak was elected new state Coordinator. Kolkata (Eastern Centre) A delegation of senior members and their facility, led by Mr.S K Basu, Past President, visited Sri Lanka between 23rd – 30th March 2016 on business-cum-pleasure trip, on an invitation from National Construction Association of Sri Lanka (NCASL). The delegation met the Senior Members of NCASL at their Seminar Hall. Mr. Basu introduced the members of the delegation and explained the general construction scenario in India and necessity of this type of meeting in between the two Associations to build a bridge between the two countries for the cause of construction fraternity and mutual benefit. He also discussed about the various opportunities in India for overseas contractors. NCASL informed the delegation about many big projects coming in Sri Lanka and the acute shortage of skilled workers. Mr. Basu explained about the initiative taken by BAI through NSDCI and offered assistance for forming such institutions there. Delegation also enquired about the possibilities and procedure for working in Sri Lanka. The overall interactive meeting was fruitful and Mr Basu invited all members of NCASL to India to exchange views for the good of construction industries of both the countries. A meeting of the Executive Committee of Eastern (Kolkata) Centre was held in the Guest House of construction site of M/s S. K. Samanta & Co. Pvt. Ltd. (SKSCPL) in Bilaspur on 9th April, 2016. Before the meeting, the members visited Dipka Coal Handling Plant & Workshop, Gevra Silo Site, project sites at Kusmunda and Surshakti TMT Bars Rolling Mill Division. The members also visited the Construction Workers Training Institute in Dipka, established by SKSCPL.

A function to felicitate Mr Sudip Kumar Dutta on his being elected as State Co-ordinator of BAI West Bengal was held in Kolkata on 6th May 2016. Mr S K Basu, Past President was the Chief Guest. Mr Ashok Kumar Chandak, Chairman-Durgapur Centre and Mr R K Debnath, Chairman – Durgapur Centre were the Guest of Honour. Mr Dutta in his speech expressed his desire to open more Centres in West Bengal and sought the co-operation of everybody. Mr S K Basu briefed the gathering of various activities of BAI. Other senior member from the adjoining areas also graced the occasion with their family members. Members of the Centre visited Durgapur Centre for the installation function of office bearers on 8th May 2016. A Seminar on GST, “Decoding and Gearing up for Draft GST Law’ was organised by the Centre in association with ASSOCHAM on 24th September 2016 at Hotel Taj Gateway, Kolkata. The key note address was given by Shri Sumit Dutt Majumder, Ex-Chairman, Central Board of Excise and Customs; Shri J.K. Mittal, Sr. Advocate in Indirect Taxes; Shri Vijay Kumar, Principal Commissioner of Service Tax-I, Government of India and Shri Ajit Kumar, Dy. Commissioner of Central Excise, Government of India. About 97 members of BAI including members from Kolkata, Durgapur and Haldia Centres attended the Seminar. The Centre hosted the Sixth of the Managing Committee and Fourth Meeting of General Council of BAI for the year 2016-17 in Hotel ITC Sonar, Kolkata on Saturday, the 4th March 2017. Mr Surojit Samanta, Chairman welcomed the members attending the meeting and thanked BAI-HQ for giving the opportunity to host the meeting. The Centre also hosted the welcome dinner on Friday, the 3rd March 2017. In the evening of Saturday, 4th March 2017, after the meetings, instead of usual entertainment programme, which is arranged for the members to unwind, centre kept an ‘Open House’ during the fellowship dinner wherein members were invited to give vent to their thoughts with regard to talking construction industry, BAI organizational issues / suggestions for the future and lot of deliberations took place which was appreciated by everyone. The Centre organised a Visit Construction Site On 9th April, 2016 all Office Bearers and Executive Committee Members were visited construction site of S.K. Samanta & Co Pvt Ltd., at Gebra, Bilaspur, Madhya Pradesh and happy to note the ongoing construction work. In the evening Chairman, Sri S.K. Samanta hosted the first monthly meeting of the Executive Committee for the year 2016-17 at their Guest House at Bilaspur. The entire programme was well organized by his company.

The Centre organised a Felicitation to State Co-ordinator, BAI-WB, A felicitation function was organized on 6th May, 2016 at Bengal Club, Kolkata to felicitate Sri Sudip Kumar Dutta, State Co-ordinator, BAI, West Bengal along with the Chairman of BAI, Durgapur and Haldia Centre. Sri S.K. Basu, Past President, BAI was the Chief Guest. The programme was attended by the members of Durgapur and Haldia Centre also. After felicitation, a cultural programme was organized which was performed by family members of our Eastern, Kolkata Centre followed by Fellowship Dinner. The Centre organised a Visit Durgapur Centre, Members of our Eastern (Kolkata) Centre headed by Sri Sushanta Kumar Basu, Past President attend the Installation Ceremony of New Chairman of BAI, Durgapur Centre on 8th May 2016 at Hotel Citi Resideny, Durgapur. In this programme Durgapur Centre also felicitated our State Co-ordinatory, Sri Sudip Kumar Dutta. The Centre organised The 66th Annual General Meeting of the Centre was held on 22nd June, 2016 at the Centre where the members confirmed the Minutes of the last Annual General Meeting and also confirmed the Annual Report and Audited Balance Sheet for the year 2015-16 The Centre organised a seminar on GST, “Decoding and Gearing up for Draft GST Law”, was organized by Builders’ Association of India, Eastern (Kolkata) Centre in association with ASSOCHAM on Saturday, 24th September, 2016 at Hotel Taj Gateway, Kolkata from 10.00 AM onwards. The seminar started with welcome speech of Sri Surojit Samanta, Chairman of the Centre and the key note address was given by Sri Sumit Dutt Majumder, Ex-Chairman, Central Board of Excise and Customs and also an eminent Author, Columnist and Customs and GST expert. Sri J. K. Mittal, Sr. Advocate on Indirect Taxes and an eminent writer on the subject addressed the gathering on some technical aspects of GST. Sri Vijay Kumar, Principal Commissioner of Service Tax-I, Govt. of India and Sri Ajit Kumar, Dy. Commissioner of Central Excise, Govt. of India addressed the gathering thereafter and briefed about the current status of enactment of GST Law. Sri Sanjay Jhunjhunwala, Chairman, ASSOCHAM - Eastern Region, cited the role of GST to get rid of the cascading effect of indirect taxes on business. Thereafter, two very detailed, exhaustive and informative technical sessions were conducted by Sri Sumit Dutt Majumder and Sri Pulak Saha of Price Waterhouse Coopers (P) Ltd. Both of them took questions from the audience for almost half an hour each. 97 members of BAI including members from Kolkata, Durgapur and Haldia Centre attended the seminar. The event was followed by Lunch.

The Centre received BAI Award 2015-16 towards Image Building Activities by a Centre. The last MC/GC meeting of the year 2016-17 was hosted by our Centre at ITC Sonar on 4th March, 2017. On 3rd March, welcome dinner was also arranged at the same venue. Hon’ble Governor of Tripura, Sri Tothagata Roy was the Chief Guest and Inaugurate the MC/GC Meeting. Maximum number of members throughout the country were attended During the meeting, various agenda items was discussed and resolved unanimously. In the evening there was a Farewell Dinner at ITC Sonar, Kolkata. As per the opinion of the members, the entire programmed was well managed particularly the special Hospitality of Bengal. Gujrat (Ahemdabad) Centre Gujrat Contractors Association (GCVA) organized Gujrat Vibrant Summit & Awards 2016 in Ahemdabad on 29th April 2016. Mr Nitinbhai Patel, Hon’ble Minister of Road & buildings, Govt of Gujrat was the Chief Guest. Mr. B Seenaiah, Past President was the Guest of Honour. Various awards were presented to the contractors / builders / infrastructure companies on the occasion. Prominent luminaries from the building and construction industry graced the occasion.

Gurgaon Centre The first BAI Centre in Haryana State i.e. Gurgaon was inaugurated by Mr. Avinash M. Patil, President on 17th June, 2016 in Gurgaon. Mr. Rajiv Goel was installed as the first Chairman of Gurgaon Centre by Mr. Avinash Patil. Mr. R. Gupta, Vice-President, BAI presided over the inauguration function. Patron Membership Certificates were distributed to the newly enrolled Patron Members of the Centre. Mr. Lal Chand Sharma, Imm. Past President & Trustee, BAI spoke about BAI and the various issues confronting the building and construction industry being tackled by BAL Other senior members from Delhi Centre, Executive Secretary & Executive Officer-Delhi Office were also present on the occasion. Mr. Igor Palka, Chief Executive Officer, M/s bC Expo India Pvt. Ltd. - organisers of 'BAUMA CONEXPO 2016' was also present on the occasion and briefed the gathering about 'BAUMA CONEXPO 2016' - International Trade Fair for Construction Machinery, Building Material Machines, Mining Machines and Construction Vehicles in India, to be held in Gurgaon between 12th and 15th December, 2016. Gurgaon Centre hosted the Fifth Managing Committee and Third Council Meeting 2016-17 of BAI on Monday, the 12th December, 2016, alongside the ‘BAUMA CONEXPO INDIA 2016’

– International Trade Fair for Construction Machinery, Building Material Machines, Mining Machines & Construction Vehicles, in HUDA Grounds in Gurgaon, in a specially erected conference hall at the venue of the Exhibition. Mr. Rajiv Goel, Chairman welcomed all in the meeting and thanked the President and others for hosing the meeting in the very first year of its formation. The Centre had arranged for a welcome dinner on Sunday 11th December 2016. The Centre, in association with senior members from BAI Delhi Centre arranged for a courtesy visit of Mr Abhai Sinha, Director General, CPWD who interacted with senior functionaries of BAI. He was in particular briefed by the issues of contractors by Mr Avinash M Patil, Mr R N Gupta and Mr Neerav Parmar.

Hyderabad Centre The installation of New Office Bearers for the year 2016-17 was held on 1.4.2016. With Shri P. Narasimha Rao Chairman, Shri Anirudh Gupta, Vice Chairman, Shri K. Chandra Shekar Reddy, Secretary, Shri Y. S. Rama Raju, Joint Secretary, Sri. S. Srinivas Rao, Treasurer. During this year the centre has concentrated on the problems being faced by the construction industry in Roads, Bridges, Housing, Irrigation etc. The Hyderabad Centre was awarded Special Award for conducting XXVII All India Builders Convention at Ramoji Film City, Hyderabad for the year 2015-16. During this year the centre has enrolled 379 more members into BAI as on 31.3.2017. The Centre will be adding some members to strengthen the BAI. Ichalkaranji Centre Mr. Rajendra B. Khanderajure was installed as the Chairman of Ichalkaranji Centre for 2016-17 on 21st May, 2016 by Mr. Avinash M Patil, President. Mr. Suresh B. Patil alongwith other office bearers of the Centre, State Chairman-Maharashtra and Mr. Vijay Devi, Trustee were the Guests of Honour. Mr. Pratap B. Salunkhe, Past State Chairman was also present on the occasion. Ichalkaranji Centre has instituted 'Jeevan Gourav Purskar' and 'Yuva Gourav Purskar'. On 21st May, 2016, Mr. Uday Gokhale was bestowed the 'Jeevan Gourav Purskar', while Mr. Jahir Soudagar and Mr. Firoj Shikalgar were bestowed the 'Yuva Gourav’. Centre organized ‘Tree Plantation’ drive to plant 1000 trees in and around Ichalkaranji which was organized by Mr Prashant Rasai, CEO-Ichalkaranji Muncipal Council in the presence of the other senior

officials of the Council as well as the Centre. The event was covered by Media. Indore Centre The Centre organise a meeting of all the members of BAI – Indore Centre called on June 30th, 2016 at the Office of Highway Infrastructure Pvt. Ltd. 57 FA Sch. No 94, Pipliyahana Junction, Ring Road Indore to discuss various issues about the taxes and to sort out the same by sharing views & suggestion. The Centre organise a meeting of all the members of BAI – Indore Centre called on Sep 9th, 2016 at the Office of Highway Infrastructure Pvt. Ltd. 57 FA Sch. No. 94, Pipliyahana Junction, Ring Road Indore. An agenda for a meeting was to discuss ESIC Applicability to Construction workers, Provident Fund Matters and Service Tax Matter. The Centre organise a meeting of all the members of BAI – Indore Centre called on October 07th, 16 at the office of Highway Infrastructure Pvt. Ltd. 57- FA Sch. No. 94, Pipliyahana Junction, Ring Road Indore, with retired PWD Engineers regarding the Amendment in tender’s condition of Model tender documents. The Centre organise an Interactive session with Hon’ble Mr. Ajay Kumar Mehta (Regional P.F. Commissioner) held on January 13th, 2017 4 PM at Hotel Shreemaya Residency A.B. Road Indore. The Centre organise a meeting of all the members of BAI Indore Centre called on March 03rd, 2017 at the office of Highway Infrastructure Pvt. Ltd. 57 – FA Sch. No. 94, Pipliyahana Junction, Ring Road Indore. An agenda for a meeting was GST law & representation to the different departments for the same. Kanyakumari Centre Mr. R. Radhakrishnan, Past President & Past Trustee installed Mr. R. Govindan as Chairman of Kanyakumari Centre for 2016-17 on 6th April, 2016 alongwith other office bearers. Mr. M. Thirusangu, State Chairman, Tamil Nadu, Pondicherry and Andaman Nicobar also graced the function. The Centre contributed Rs.1,00,000/- from Association Amount for State level meeting and National Level Meeting. The Centre organised Build Expo held on July 1, 2, 3, 2016 at Perumal Mandapam., The Centre organised Blood Donation and Eye Camp on 06.08.2016 at Dhevi Kalaiyarangam, Thattan Vilai, was held from 9 am. to 2 pm. many members

donated their blood. Cataract checkup was done and spectacles were provided at discount rate. During the year, the Centre conducted Twenty (20) Executive Committee Meetings. Karnal Centre Joining the growing trend across India, that of existing BAI Centres sponsoring opening of new Centres, Delhi Centre created mile stone by sponsoring and opening of third Centre in a row by opening Karnal Centre which is the second centre in Haryana. Delhi Centre has already opened Gurgaon Centre in Haryana on 17th June 2016 which was inaugurated by Mr Avinash M Patil, President. Karnal Centre was formally inaugurated by Mr. Lal Chand Sharma,Imm. Past President and Shri R N Gupta, Vice President on 18th July 2016, alongside the opening of Delhi East Centre in a grand function organized at New Friends Club, Mathura Road, New Delhi. Also present on the occasion were Mr. Ram Avtar, Chairaman, Delhi Centre, Shri Rajiv Goel, Chairman-Gurgaon Centre and other senior members from and host of other members from Delhi Centre. Mr Vijay Kumar Gupta was formally installed as the first Chairman of BAI - Karnal Centre. Mr Lal Chand Sharma spoke on the occasion about BAI, appreciated the good efforts put in by Shri R N Gupta, Vice President, Mr Ram Avtar – Chairman and other in opening of the second centre in Haryan a and opening of third centre in a row in the year 2016-17. Mr. Sharma also distributed Patron Membership Certificate who were present on the inauguration ceremony. Karnataka (Bangaluru) Centre The Centre organised a meeting to discuss about the XXVIII All India Builders’ Convention to be held on January 2018 at Bengaluru. Shri K.S. Someshwara Reddy informed that during the Special Meeting called on 15th August 2016 at Builders’ NGV Club, Shri R. Radhakrishnan – Past President & Trustee, BAI requested members to propose the tentative dated for the Convention. Shri Basavraj Totad suggested 5th, 6th & 7th January 2018 or 19th, 20th & 21st January 2018, the dates are on Friday, Saturday and Sunday. It was unanimously decided as 5th, 6th & 7th January 2018. The centre organised an event for Honouring of Artisans on the EVE Builders’ Day held on 23rd October 2016 on the occasion of Builders’ Day – 2016, 100 Artisans were honoured at Builders’ NGV Club. The Chief Guest for the function was Shri R.R. Jannu, IAS, Commissioner of Labour, Government of Karnataka, Shri K.S. Someshwara Reddy, State Chairman, Karnataka, BAI was the Guest of Honour, Shri A.S. Chinnaswamy Raju – Past President & Trustee, BAI and Shri H.N. Vijaya Raghava Reddy –

Past Vice President, BAI & President – Builders’ NGV Club graced the occasion. Hon. Secretary Shri K.N. Babu Reddy proposed the vote of thanks. Kodaikanal Centre As a part of image building activity, members of Centre took up a social service project of cleaning Kodaikanal lake culverts and storm water drains. The local print and electronic media gave wide coverage to the efforts of the Centre. Kodungallur Centre The Kodungallur Centre conducted 12 Executive Committee and General Body Meeting. The Centre organised newly brought up GST bill on 07.11.2016 for the members by Chartered Accountant Mr. Thomas P. Chaly. The Centre organised an awareness programme on 07.01.2017 for labourers about banking transactions and online payments on the event of demonetization and cashless economy, which helped out a log of people in bringing about ease of operation in the bank transactions.

The Centre organised a seminar on “Fire & Safety on 4.2.2017 by Mr. Sanoop – Senior Fire Safety officer – JNP LLC Riyad, KSA.

Kottayam Centre

Mr. John Paul K. was installed as State Chairman, BAI Kerala on 21st April, 2016 by Mr. Avinash M Patil, President in Kottayam. Mr. Mu. Moahan, Vice-President, was the Guest of Honour. Mr. V. M. Fazal Ali, Imm. Past Vice-President, and Mr. Raju John, Executive Secretary were also present. Mr. Avinash Patil released the 'BAI Kerala Directory' and Mr. Gibu Mathew, Convenor 'BAI Kerala Directory' presented copies of the directory to all the dignitaries.

Kotayam Centre also hosted 'First BAI Kerala State Meeting for 2016-17' on 21st April, 2016. Mr. John Paul K., State Chairman, Kerala, chaired the meeting. Issues concerning the building and construction industry, particularly in Kerala and on the national front too were discussed. BAI organisational matters were discussed. Office-bearers and senior functionaries of BAI Centres in Kerala attended the meeting.

The Centre hosted the Third Meeting of the Managing Committee of BAI for the year 2016-17 on Sunday, the 18th September 2016 at Backwater Ripples, Kumarakom, Kottayam. Kumbakonam Centre Er. R. Venkatesan was installed as Chairman for 2016-17 on 24th April 2016 alongwith other office

bearers. Mr Mu Mohan, Vice President, Mr M Thirusangu, State Chairman, Tamil Nadu, Pondicherry and Andaman Nicobar were also present on the occasion. Dr Sembiyuran, eminent orator delivered a special talk on the occasion. Er. R. Soundarajan, outgoing Chairman formally handed over charge to Er. R. Venkatesan.

Madurai Centre

The Centre organised Builders’ Day 2016-17 on 21st February 2017. Dr. Mangesh G. Korgaonker, Director General, National Institute of Construction Management & Research (NICMAR), Pune, was the Chief Guest. Mr. Avinash M. Patil, President, BAI presided over the function. The keynote address was delivered by Mr. V. Ramachandran, Past President and Past Trustee, BAI. Mr. R. Subburaman, Trustee, BAI; Prof. Dr. K. Arunachalam Dean (Academic Process), Thiagarajar College of Engineering, Madurai; Mr. A. Puhazhendi, Past Vice President, BAI; Dr. B. Sivagurunathan, Associate Professor & Head of Civil Engineering Department, Thiagarajar College of Engineering, Madurai, were the Guests of Honour. The Rolling Shield, awards and certificates of the Election Competition, Problem Solving Competition and Quiz Competition, conducted earlier by Madurai Centre were presented to the winning students from the 16 Engineering Colleges. Mumbai Centre

Mr. Pradeep Nagawekar was installed as the Chairman of Mumbai Centre for 2016-17 by Mr. Avinash M. Patil, President on 24th May 2016 alongwith other office bearers of the Centre. Dr. Rajiv B. Krishnani, Vice-President, Mr. Suresh B. Patil, State Chairman Maharashtra; Mr. C. G. Deochake, Hon. Gen. Secretary and Mr. Neerav Parmar, Hon. Gen. Treasurer (outgoing Chairman of BAI Mumbai Centre), also graced the installation function. Senior functionaries from BAI Centres in Chattisgarh, Goa, Gujarat, Madhya Pradesh & Maharashtra States and many members from the Centre attended the installation function The first Western Zone Meeting of Builders' Association of India (BAI) for 2016-17 was held on Tuesday, 24th May 2016 in Mumbai. The meeting was hosted by BAI Mumbai Centre. Dr. Rajiv B. Krishnani, Vice President chaired the meeting. Mr. Avinash M. Patil, President also graced the occassion. BAI HQ Office bearers and West Zone office bearers also graced the dais during the meeting. Host of issues confronting the building and construction industry in Chattisgarh, Goa, Gujarat, Madhya Pradesh & Maharashtra States in particular and on the national level in general were discussed. Non-availability of natural sand in Maharashtra, Madhya Pradesh and Chhattisgarh; Price Variation/ Escalation of Construction Materials; Pre-qualification and Registration in Government

Departments, withdrawal EMD system by Maharashtra Government; 'Single Window' Registration in some States; EPF applicability to casual and temporary construction workers; training and certifying construction workers; Real Estate (Regulation and Development) Bill 2013 (RERA) Act etc. were some of the issues which were discussed in depth.

Mr. Pradeep Nagawekar, Chairman, Mumbai Centre was the Chief Guest at the Lecture Meeting on 'Real Estate (Regulation and Development) Act, 2016 and its implications for builders, developers, stakeholders, implications on redevelopment projects and enhanced role of Chartered Accountants' held on 8th June, 2016 in Mumbai. The Lecture Meeting was organised by 'Committee for Co-operatives and NPO Sectors' of The Institute of Chartered Accountants- of India (ICAI). CA Tarun Ghia, Chairman, 'Committee for Co-operatives and NPO Sectors' of ICAI, presided over the lecture meeting. The Centre arranged a meeting of the stakeholders coming under Real Estate (Regulation and Development) Act, 2016 (RERA) on 9th July 2016. From BAI, Mr. Pradeep Nagawekar, Chairman, BAI Mumbai Centre; Mr. D.L. Desai (Shankarbhai), Trustee, BAI; Mr. Ram M. Bhatia, Past Vice President, BAI; Mr. L.D. Kotwani, Past Hon. Gen. Secretary, BAI and Mr. Bhushan Mehta, Past Chairman, BAI Mumbai Centre were present. From Practicing Engineers, Architects and Town Planners Association (India) (PEATA), Mr. Manojkumar A. Dubal, President; Mr. Tarun Motta, Vice President, Mr. Manoj Daisaria, Past President and Mr. Shashikant Jadhav, Executive Committee Member, were present. Mr. Tarun Ghia represented Institute of Chartered Accountants of India (ICAI). Suggestions to be made to the Government of Maharashtra, whill will be framing the rules for implementing RERA were discussed. The suggestions were discussed and finalized and the same has been forwarded by BAI to The Principal Secretary (Housing), Government of Maharashtra.

The ‘6th Construction Week Awards’ was held in Mumbai on 21st September 2016. Many senior functionaries of BAI Mumbai Centre attended the same. Mr. Pradeep Nagawekar, Chairman, Mumbai Centre; Mr. C.G. Deochake, Hon. Gen. Secretary, BAI and Mr. Neerav Parmar, Hon. Gen. Treasurer, BAI were given the honour of presenting some of the Awards. M/s. New India Construction – firm of Mumbai Centre Hon. Treasurer, Mr. Harshad Shah was awarded the Runner Up award as ‘Road Contractor of the Year’ for their ‘BRTS Project’ Pune. Muvattupuzha Centre The Centre every month conduct the General Body Meetings on third Thursday. Few out bond general

body meetings were held in various places. One of our general body meetings conducted at Club mud Resort in Maldives with good strength of members. All GCMC meetings we are providing a remarkable presence from the centre. The centre sent representation to several PWD Matters like amendments of PWD Manual, Standard bidding Documents etc. On this matter authorities consider majority of our demands. One of the main benefits was adding the price escalation in PWD contracts beyond 18 months period contracts and another highlight was in Standard Bidding Document i.e. fixing the responsibility to the employer, engineer and contractor. The centre write to Works Authority whenever arbitrary tenders issued by departments in Public Works Department, Kuttanad Packages, Irrigation Departments, Forest Industries Travancore and Kochi Metro Rail Corporation Ltd etc. In the case of using branded – Cement and Steel in PWD works. We approached the Chief Secretary; he quickly responded and gave direction to the Chief Technical Examiner to conduct a meeting with us. He had released an order mentioning that the quality and specification of the material is necessary rather than its brand. We are able to stop the unfair tender practices followed in the Kerala Construction Corporation by representing properly before the competition commission of India. By this step we were able to reinitiate transparency in tender procedure. BAI – Muvattupuzha Centre and 46 A Class Contractors under it are the Petitioners before the Hon’ble High Court of Kerala in WP© No.39162/2016. They approached the High Court seeking to quash certain orders (Exts. P11 and P33) issued by the Government of Kerala dated 20.2.2016 and 21.20.2016, whereby certain contract works are entrusted by the State Government with the 11th respondent Uralunkal Labour Contract Co-operative Society (ULCCS) without any tender. The Court opined that the award of works under challenge is tainted with malafide, favouritism, unfairness and illegality. Hence the Court decided to interfere with the award of works to the ULCCS by the Government of Kerala. Accordingly, the award of work in respect of Amabalpuzha-Thiruvalla Town Road was set aside. As regards the other works under the challenge, the Court quashed the same to the extent to which agreements were not executed as on the date of filing the writ petition i.e. 07.12.2016. The Government was directed by the High Court to invite expression or tender or offers either from the contractors general or from accredited agencies at the earliest. The High Court also reminded the State

Government, that it is always better to invite tenders by issuing notifications so as to ensure transparency and to avoid any arbitrariness or unfairness in the matter of award of contracts by the State Government. In every year we are conducting three family meetings including one Builders Day Celebration in a various venues. Most of our family members were present. Now our strength becomes 63 patron members. Mysore Centre The Centre Office Bearer were installed on 3.4.2016. Shri B. Seenaiah, Past President BAI, presided as the Chief Guest with Shri C. K. Kumaravel Founder and CEO – Naturals, Shri Mu. Moahan, Vice president, BAI Southern Region & Shri K.S. Someshwara Reddy State Chairman of BAI Karnataka were the Guests of Honour for the occasion. The Centre organised a workshop on Personality Development / Leadership Skills for the new team of office bearers for the year 2016-17 Sunday, 24th April in our Past Chairman Shri K. Sriram's Farm 'Carisbrooke', Koodanahalli, Mysuru. All the executive committee members, event heads, coordinators participated in a day long orientation program to improve their leadership qualities. The Centre organised a workshop Builders' Association of India, Mysuru Centre bridges the gap between academia & the industries by conducting various need based activities for the civil students. The civil branch of Vidya Vikas Institute of Engineering & Technology Department of Civil Engineering students were held an departmental fest “Vruddhi 2K16” on 25 April 2016. Builders' Association of India, Mysuru Centre was one of the sponsors for the event. A press meet was held on 29th April 2016 towards May Day Celebrations at patrakartara bhavan. The chairman N. Subramanya and members of construction workers welfare committee (CWWC) briefed the print and visual media on various activities and programmes to be conducted on the occasion of May Day. The two days Skill Development Workshop was organized in association with M/s. Asian Paints at MBCT ® Training Centre, Mysore. Nearly 60 painters and wood polishers actively participated and learnt the new techniques in wood polishing. Certificates were issued to all the participants during the valedictory function on 21st May 2016. The Centre organised a workshop on 25th June 2016 Debate competition for high school student on “USE of plastic is a boon or bane” & for Under Graduate Students on “Development Works at Chamundi Hill… is it necessary?” was held at MBCT Premises.

Nearly 60 students actively participated in this event. Prizes were distributed to the winners. The Centre organised a workshop the 9th General Meeting – “Builders’ Day Celebration” on 27th November 2016 was held at 6.00 PM in Hotel Golden Land Mark Resort, KRS Road, Mysuru with the theme – vision 2020 – Skill India to Build India”. The program was commenced by the invocation by Master Pranav. Our Center Chairman Shri N Subramanya welcomed the gathering. The Chief Guest was Shri Avinash M. Patil, National President, BAI, Guest of Honour were Shri Mu. Moahan, Vice President BAI, Shri K.S. Someshwara Reddy, State Chairman, BAI Karnataka. Shri G. Ashok was awarded the ‘Builder Par Excellence of the year’ – 2016, Shri N.S. Muralidhara was awarded with the ‘Member Extraordinaire Award’, Shri Parvez E Rudina was awarded with ‘Life Time Achievement Award’. During the year, the Centre conducted Eleven (11) Executive Committee Meetings. Namakkal Centre Er. K. Mani was installed as the Chairman of Namakkal Centre for 2016-17 by Mr. Mu. Moahan, Vice-President on 22nd May, 2016 alongwith other office bearers. Mr. M. Thirusangu, State Chairman, Tamil Nadu, Pudhuchery and Andama Nicobar was the Guest of Honour. Mr. Pa. Raman, Secretary, Salem Kamban Kalam was the Guest Speaker and enthralled the gathering with humorous anecdotes on everyday life. Office-bearers from various Centres in Tamil Nadu were present on the occasion. A lecture meeting on ‘Town Planning’ was oganised by Centre on 28th September 2016. Er B Palanivel, Chairman, Deptt of Town & Couontry Planning, Govt of TN was the Keynote speaker. Dr. R Asokan, Principal, Kongunadu College of Engg & Tech was the Chief Guest. Mr Ulagantha Sankar and Ms Vasanthi, HOD were also present. A multi-purpose hall ‘Namakkal Builders Mahal’, conceived and constructed by Namakkal Builders Association Trust - a NGO under the aegis of the Centre was inaugurated on 4th Sept 2016. Mr P Thangamani, Min of Electricity &Prohibition Excise Duty, Dr V Saroja, Min of Social Welfare, Govt of TN, MLA and other senior officers and functionaries of BAI were present on the occasion. Centre conducted a ‘Special Personality Development Programme’ ‘URAVENNUMPALAAM’ on 25th Oct 2016. JCI Sen, R S Prabhu, Past Zone President, National Director Training-Erode was the trainer of the

programme. It was very useful for the members. Various awards were given during the programme. Chairman and other members / office bearers co-ordinated organizing of the event. The centre organised new Office Bearers installation function and Annual General Body Meeting on 22.05.2016 at Golden Palace Hotel, Namakkal. All India Vice President Shri M. Moahan as Chief Guest, State Chairman Shri. M. Thirusangu as a Special Guest. Inaugural Function of Namakkal Builders Mahaal on 04.09.2016, organised by Namakkal Builder Association Trust. Our Past National President Bhisma R. Radhakrishnan, All India Vice President Mr. Moahan, State President Mr. M. Thirusangu, State Ministers Hon’ble P. Thangamani & V. Saroja, MLA K.P.P. Baskar, Local Municipal Chairman Mr. Karikalan and other dignitaries participated. Our Centre organise a Speaker meeting on 28.09.2016 for Civil Student Members at Kongunadu Engineering College, Thottiyam, Trichy District. Topic : Town and Country Planning Rules, Speaker : Er. B. Palanivel, State DTCB Committee Chairman. General Body meeting on 25.10.2016, Self Development course, Topic : Uravennum Paalam, Conducted by : Jc. R.S. Prabhu. We honour our charter Chairman Er. R. Ganesan, our Vice-Chairman Mr. K. Venkatachalam as best contractor award receivers. Our Centre organised a Platinum Jubilee Celebration and Builders Day Celebration on 11.12.2016 at Namakkal Builders Mahaal. During the year, the Centre conducted Nine (9) Executive Committee Meetings. Nashik Centre Centre hosted the 2nd Meeting of the Managing Committee and 1st Meeting of General Council of BAI for the year 2016-17 in Hotel Express Inn, Nashik on Saturday, the 2nd July 2016. The Centre simultaneously hosted the Seventy Fifth ( 75th – the Platinum Jubilee ) Annual General Meeting of the Builders’ Association of India on 2nd July 2016 at the same venue. Mr. Rameshwar Malani, Chairman of the Centre formally welcomed the members to the meeting and thanked BAI-HQ for giving the Centre the opportunity of holding the MC & GC Meeting and the 75th Annual General Meeting of the BAI. The meeting was formally inaugurated by Mr Kalraj Mishra, Hon’ble Union Minister for Micro, Small & Medium Enterprise by lighting of the traditional lamp. Centre also hosted the welcome dinner on 1st July 2016 and farewell dinner on 2nd July 2016. All members who attended the meetings appreciated the

arrangements made for the meeting and hospitality extended. Phaltan Centre Mr. Pramod Nimbalkar was installed as the Chairman of Phaltan Centre for 2016-17 by Hon'ble Srimant Ramraje Naik Nimbalkar, Speaker, Legislative Council, Maharashtra on 16th April, 2016. Mr. Avinash M. Patil, President, Dr. Rajiv B. Krishnani, Vice-President, Mr. Suresh D. Patil, State Chairman, BAI Maharashtra and Mr. Vijay Devi, Trustee, and other office-bearers of Phaltan Centre and their families were present during the function. Ponneri Centre A new BAI Centre Ponneri near Chennai was formally inaugurated by Mr. Avinash M Patil, President in Chennai on 7th September, 2016. Southern (Chennai) Centre took lead in forming Ponneri Centre. Mr. A. Vijay Kumar was installed as the first Chairman of Ponneri Centre by Mr. Avinash M Patil. Senior Members and functionaries of the Southern Centre and nearby Centres graced the occasion. Members and senior functionaries of the Southern Centre co-ordinated the formation of Ponneri Centre.

Pune Centre Dr Rajiv B. Krishnani was installed as the Vice President of BAI for 2016-17 by Mr Avinash M Patil, President - BAI on 6th April 2016. Mr Siddharth Shah was also installed as the Chairman of Pune Centre for 2016-17 by Mr. Patil alongwith other office bearers. Mr. D L Desai (Shankarbhai), Trustee - BAI and Mr A Puhazhendi, Past Vice President - BAI were the Guests of Honour. Mr. Suresh D. Patil, State Chairman-Maharashtra also graced the occasion. One day site visit to crushed sand plant installed by M/s. B.G. Shirke Construction Technology Pvt. Ltd. At Alandi on 20th June 2016. Shri Datta Ghule – Convenor of Site Visits. The Centre Conducted Half Day Seminar on Total Quality Management specially with reference to the Construction Industry was held at Sumant Moolgaonkar Hall, MCCIA, Pune. Mr. Prakash B. Yardi will be our Faculty Member, who is associated with the Quality Circle activities in Cummins India for more than 20 years, was faculty for the said subject. More than 100 delegates attended the seminar. Mr. Jagannath S. Jadhav was the Convener of this Seminar. The Centre Conducted 8th Edition of Students’ Internship Programme conducted between 30th May 2016 to 14th June 2016 about 243 nos students

participated. Students were given certificates of internship. Likewise 9th Edition of Students’ Internship Programme was held between 50th December 2016 to 20th December 2016 about 55 nos students participated. Due to over whelming response of students number of participants were increase substantially. Shri Jaideep Raje and Shri Sanjay Vaichal were the coordinators of both the students’ Internship Programmes. To encourage and appreciate efforts of Children of out members a Children’s Felicitation Programme was held on 30th July 2015 at The Ladies Club, Pune. More than 100 Children were felicitated and given gifts and certificates at the hands of Chief Guest Ms. Shashwati Pimplikar, a famous Marathi actress. Builders’ Day Celebration 21st October 2016 at The Residency Club, Pune; Builders’ Day is celebrated every year to pay tributes to the builders, engineers & contractors and acknowledge their contribution in the nation building. The theme for 2016-17 was “Vision 2020 Skill India to build India.” Mr. M.J. Halbe, Mr. Vishwas Lokare, Mr. Sanjay Vaichal & Mr. Shafique Khan all very Senior Members & Past Chairmen of Pune Centre were felicitated for their exemplary work in the field of construction and felicitated at the hands Chief Guest Er. S.D. Limaye, OSD, Pune Metro Project & Consultant, Railway & Tunnel Projects. In a traditional manner by offering them a shreefal, shawl and a Memento. All the felicitated members shared their experiences and enlightening thoughts to encourage others for performing and achieving better. 70 Plus members attended the function. Well Built Structure Competition 2016. Well Built Structure Competition (WBSC) in its 20th series had 40 Plus participants The competition is held primarily to encourage Quality, Speed and Economy, Labour walface and safety aspects are also considered as important aspects, BAI – B.G. Shirke Awards for 2016 competition were awarded in the presence of 300 plus building professionals. Shri Abhai Sinha, Director General, Central Public Works Department (CPWD), & Shri L. Moorthi, Past Vice President South presided the Award Ceremony. Mr. Jana of M/s. B.G. Shirke Construction & Technology Pvt. Ltd. Sponsor of the WBSC awards did the honors of giving away awards to the winner participants. Shri Mahesh Mirani was Chairman – WBSC Committee.

Construction of Toilet Blocks / Fresh Rooms for Girls : Pune Centre under its social obligation every year constructs a set of Toilet blocks / Fresh Rooms for rural schools which imparts education to mostly Girls students. Under this programme BAI Pune Centre constructs a Toilet Block / Fresh Room for Girls students at Village Walhe under the Guidance of Shri D.S. Shirole Convenor of this activity was main force behind this programme, which he undertakes every year with utmost sincerity. Western Region Conference on 25.02.2017 at The Hotel Aurora Towers, Pune. BAI Vice President Dr. R.B. Krishnani held the Western Region Conference on 25.02.2017 at the Hotel Aurora Towers, Pune. The conference was well attended by more than 100 delegates. Critical issues like River Sand crises, PWD Contractor registration, Skill Development were discussed at length. Seminar on GST on 25.03.2017 : Builders’ Association of India, Pune Centre conducted a Seminar on GST – Goods & Service Tax on Saturday 25th March 2017 at Residency Club, Pune. Eminent Speaker’s Dr. Waman Parkhi – Partner KPMG Mr. Chirag Shah – Partner – Deal Advisory KPMG Mr. Kirti Oswal – Partner – BSR – Associates LLP. Lot of queries were raised by many delegates regarding the application of GST. It would be beneficial to our Members and all from the Construction Fraternity to attend. Representatives and Members from Construction Industry, Contractors, Promoters, Builders, Labour Contractors, Project Managers, Site Engineers and Property owners attended the Seminar. BAI Pune Centre Office Bearers; Chairman; Shri Siddharth Shah, Vice Chairman; Shri Jagannath Jadhav, Hon. Secretary; Shri Manoj Deshmukh, Treasurers; Shri Sunil G. Mate. Raichur Centre Centre organised Installation of New team of office bearers on 25th May 2016. All India vide president of Freedom fighter Samiti (New Delhi) Shri Kashi Rao Patel Graced the occasion as Chief Guest and our centre honored him with shawl garland and memento. The function was very impressive and praised by all invitees who attended. June-2016 :- In the Committee of District schedule of rates of Bellary Circle, our centre was invited and our centre represented with four members at the office of the Chief Engineer PWD North Dharwad. Detailed item war discussion was held and representation was also given in writing to revise the rates as per actual prevailing rates of labour, materials, wood etc. Accordingly the officers present in the meeting realized the things and we were assured to revise the rates with detailed analysis of newly prevailing rates.

Rajasthan (Jaipur) Centre

The Centre alongwith ‘Spoorthi’ (Ladies wing) felicitated Mr Ashok Lahoti, a BAI member, on him being elected Mayor of Jaipur. 115 BAI members and 30 members of ‘Spoorthi’ were present on the occasion. Mr Ashok Lahoti addressed the gathering and stressed upon his motto ‘Clean Jaipur Green Jaipur’. Chairman Mr Nand Kishore Goyal, State Co-ordinator Mr Ravi Kumar Kheria, Past Vice President Mr Ashok Agarwal and other senior members / office bearers graced the dais during the function. Mr Mahender Kumar Sethi, GC Member presented memento and Mr. Kheria presented ‘Gaurav Samaan Patra’ to Mr Lahoti . Ravulapalem Centre

BAI Ravulapalem Centre in East Godavari District, Andhra Pradesh, has taken a Hall from the existing Contractors’ Association Building and renovated it to have a Chairman’s Chamber, a Conference Hall, which can accommodate upto 100 people and a Bed Room to accommodate any BAI Guests. The Centre also engaged a full time employee to take care of Administrative and Financial activities of the Centre.

Satara Centre

Mr. Mangesh Arun Jadhav was installed as the Chairman of Satara Centre for 2016-17 on 7th May, 2016 by Mr. Avinash M Patil, President alongwith other office bearers. Mr. Rajiv B. Krishnani, Vice-President, Mr. Suresh B. Patil, State Chairman, Maharashtra and Mr. Vijay Devi, Trustee were the Guests of Honour. Other senior members from the centre were also present.

On 8th May, 2016, Mr. Avinash M Patil, President met Mr. Sharad Pawar, President, Nationalist Congress Party (NCP) in Satara and briefed him about BAI and its various activities. BAI President also brought to attention of Mr. Sharad Pawar to some of the vexed issues of the Indian building and construction industry and requested him to look into the same. Other senior members from Satara and other Centres were also present on the occasion.

Solapur Centre

“Builders’ Day 2016-17” was celebrated by Centre on 23rd October 2016. Dr R B Krishnani, Vice President and Mr Suresh Patil, State Chairman were Chief Guests during the celebrations.. Senior members / functionaries / office bearers were present during the celebrations. Chairman Mr Rajesh Deshmukh and his team members co-ordinated the organization of the programme. The print media gave coverage of the event.

Southern (Chennai) Centre The Centre celebrated the “Builders’ Day 2015-16” on 25th March 2016. Mr. V.M. Fazal Ali, Vice

President was the Chief Guest. Mr. R. Radhakrishnan, Past President & Past Trustee also graced the occasion. Mr. M. Karthikeyan, Past President, Dr. D. Thukkaram, Past Trustee, Mr. K. Ramanujam, Past Chairman-Tamilnadu, Mr. S. Ganapathy, Past Vice Chairman and J. R./ Sethuramalingam, Trustee were facilitated for serving the industry for more than three decades on the occasion. Health camps at various works sites, diagnosing and advising treatment to the workers were done. Entertainment programme, high tea and dinner was arranged for the families of BAI members, Senior members of the Centre co-ordinated the arrangements.

Mr. K. Venkatasen was installed as Chairman of the Centre for 2016-17, alongwith other office berarers,. by Mr. R. Radhakrishnan on 11th April 2017. Outgoing Chairman Mr. K. Selvaraj, formally handed over the charge. Mr. Mu Mohan and Mr M Thirusangu were facilitated on being elected as Vice President and State Chairman, Tamil Nadu and Pudicherry for 2016-17 respectively. Mr. M Karthkeyan was also felicitated on being elected as Trustee of BAI for 2016-19.

“World Water Day” was celebrated by Vels University, Pallavaram, Chennai on 22nd March 2016. Mr R Radhakrishnan, Past President & Past Trustee delivered the inaugural address at the ’Seminar on Preservation of Water’ held on the occasion. He alongwith other senior members of the Centre planted trees on the occasion.

Mr R Radhakrishnan graced the 3rd ‘MAYAN AWARDS’ function held in in Chennai on 30th March 2016. The event was graced by His Excellency Dr. K Rosaiah, Hon’ble Governer of Tamil Nadu.

Mr R Radhakrishnan, Past President & Past Trustee installed Mr. J. Mohan as President of 'Flat Promoters Association, Ambattur & Avadi' for 2016-17 on 3rd April, 2016. 'Flat Promoters Association, Ambattur & Avadi' are affiliated to BAI. He also installed Mr. Sivakumar as President of 'North Chennai Flat Promoters Association' for 2016-17 on 4th April, 2016. 'North Chennai Flat Promoters Association' are affiliated to BAI.

In accordance with the announcement made by Mr. K. Venkatesan, Chairman during his installation that the Centre will be organising 'Health Camp' every month during his tenure, so as to cover 5000 workers, the Centre has been along with Southern Builders Charitable Trust, since May 2016, organising 'Health Camp' across Chennai, for construction workers every month. Three such camps were organized which were attended by atleast 7 Doctors & 15 nurses from Appolo / Government Hospitals and other supporting staff with vehicles fitted with surgery and treatment equipments, carried out the diagnosing like, ECG, blood test, blood pressure, weight scale and

thorough eye check up, medicines were made available free of cost. The Doctors & Nurses were felicitated by the prominent and senior members of the Centres who attended the Camps.

A training programme on 'Air Conditioning Practices' was organised by Centre along with The Indian Society of Heating, Refrigerating and Air Conditioning Engineers (ISHRAE) on 26th May, 2016. Mr. Balakrishnan, President; Mr. Ferno Susai, Advocacy Chair; Mr. Raja Sriram, Past President / National Co- Chairman; Ms. Suganya Sriram, were present on behalf of ISHRAE and addressed the members. Mr. Raja Sriram gave a power point presentation, wherein he shared important information. He also explained about Green Buildings through a power point presentation. Mr. V. S. B. Sunder, Chairman, Traning Committee; Mr. K. Venkatesan, Chairman and other office-bearers and senior functionaries co-ordinated the organising of the training programme.

Centre organised a meeting along with office-bearers of BAI's Affiliated Association's to discuss regarding Real Estate (Regulation and Development) Act, 2016 (RERA) on 31st May, 2016. Mr. Mu. Mohan, Vice-President, Mr. K. Venkatesan, Chairman and other office-bearers and senior functionaries of Centre were present during the meeting along with members of the Affiliated Associations.

Centre organized a training programme on 'Plumbing / Sanitary Works' along with CERA on 27th June, 2016. Mr. K. Ramanujam, Managing Committee Member inaugurated the training programme. More than 100 persons participated in the training programme which was organized and co-ordinated by Chairman & other senior functioneries / members of the Centre.

The 66th Annual General Body meeting of Southern (Chennai) Centre was held on 2nd June 2016. Mr. K. Venkatesan, Chairman chaired the meeting. The report of Hon. Secretary and the Audited Financial Statement for the year 2015-16 were submitted and got approved at the AGM. The office-bearers team for 2015-16 headed by Mr. O. K. Selvaraj as Chairman was appreciated for their outstanding performance. Mr. Mu. Mohan, Vice-President addressed the members. Others senior members of the Centre also graced the dais during the AGM.

Centre in association with M/s Pidilite Industries Ltd. organised a training program in the BAI Southern (Chennai) Centre Office in Chennai on ' New Construction and Repairing Segment' on 25th August, 2016. Mr. V. K. Jina Chandra Babu, Regional Manager, M/s Pidilite Industries Ltd. conducted the training programme along with a PowerPoint presentation mainly on water proofing and repairing the structures and clarified the queries raised by the participants. Mr. P. Purushotham,

retired Indirect Tax Manager, M/s L & T was also present on the occasion. Senior Members and functionaries of the Centre were present and participated in the training programme.

Centre organized a Seminar on Real Estate Regulatory Authority (RERA) Bill on 30th August 2016. Mr Suresh Krishn, President, CREDAI-Chennai Chapter gave key-note address. Mr. K Vaitheeswaran, Advocate & Tax Consultant & Mr R Ramalingam, CA explained about RERA through a Powerpoint presentation and answered queries raised by participants. Senior members and functionaries from BAI and affiliated Associations participated in the Seminar.

Centre organized a Health Camp on 13th Sept 2016 at the work site of M/s Srinivasan Associates, Chennai. Members from the Centre participated in the camp. Mr O K Selvaraj, Imm Past Chairman explained about the Camp to the workers in Hindi for better understanding. A team of Doctors from Appolo Hospital and Govt Eye Hospital diagnosed more 300 workers. Other Senior members and functionaries of the Centre were present in the Camp.

Centre celebrated ‘Construction Workers Day’ on 5th Oct 2016 by organizing Health Camp, cultural entertainment, presenting them gifts, serving special dinner etc. The Health Camp was inaugurated by Mr. R Radhakrishnan and team of Doctors from Apollo Hospital and Govt Eye Hospital and diagnosed more 300 workers, gave them free medicines / advise for further treatment. In the evening, entertainment programme was arranged in which Mr. P Bose-Director, Directorate of Industrial Safety & Health, Govt of TN was the Chief Guest who explained the safety measures at construction site, elaborated on a number of schemes available for the benefit of construction workers and wanted them to become member of Construction Workers Welfare Board to avail and enjoy benefits of the scheme. He stressed that it is the responsibility of the builders, engineers, supervisors as well as the workers to avoid accidents. Senior members and functionaries from participated in the event as well co-ordinated its arrangements.

'Concluding Function' of BAI's Platinum Jubilee Celebrations ‘Concluding Function’ of BAI’s Platinum Jubilee Celebrations were held in the Centre on Saturday 5th November, 2016 at Chennai Grade Centre. Mr. Avinash M. Patil, President, BAI; Bhishma R. Radhakrishnan, Chairman, Platinum Jubilee Celebrations Committee, many Past Presidents / Trustees / Senior functionaries and members, in large number, participated in the celebrations. Mr. M. Venkaiah Naidu, Hon'ble Union Minister for Urban Development, Housing & Urban Poverty Alleviation and Information & Broadcasting was the Chief Guest and lighted the traditional lamp at the inaugural ceremony.

Mr. K. Venkatesan delivered the welcome address and elaborated about the history of the BAI and Mr. Avinash M. Patil delivered the presidential address. In his address he dwelt at length about the role played by the construction Industry, being the second largest in providing employment, and is contributing in the development of the country by providing the infrastructure facilities like roads, bridges, metro railways, irrigation projects, airports, sea ports.

Mrs. B. Radhika Chakaravarthy, Chief Post Master General, Chennai City Region released a Special Cover and Stamp to commemorate the Platinum Jubilee Celebrations of BAI. Hon'ble Minister received the Special Postal Cover and Stamp and formally handed it over to Mr. A. S. Chinnaswamy Raju. This historic event of releasing the Special Postal Cover and Stamp to commemorate the celebration is the first of its kind in the history of BAI. It was a proud moment for the contractors and builders fraternity.

Bhishma R. Radhakrishnan, dwelt in detail about the journey of BAI and its glorious achievements during 75 years of its existence with excellence in every initiative and endeavour as its thrust. In this context he credited Brig. Jackson, a British Engineer in the Military Engineering Department as the founding father of BAI in 1941 at Pune. He proudly informed all that BAI which was started with just thirteen members now have more than one lakh direct and indirect members, having 160 centres through the length and breadth of the country and remembered all who made it possible with their dedicated involvement. After this the Hon'ble Minister released the book '75 Years of Glorious existence - the never ending journey of excellence'. The first copy of the book was received by Mr. B. Seenaiah.

On the occasion, Mr. K. V. Rangaswamy, Former Board Member and former President, M/s Larsen & Toubro was conferred with 'Nirman Ratna' Award. Bhishma R. Radhakrishnan was conferred with 'Seva Ratna' Award.

Hon'ble Minister for Urban Development, Housing & Urban Poverty Alleviation and Information & Broadcasting, Government of India, Mr. M. Venkaiah Naidu in his address regaled the audience with his inimitable way of speech loaded with pun and humour about the serious business of nation building, In spite of his very busy schedule, he made it a point to participate in this important milestone event not only because of the significance of the Platinum Jubilee but also since the organisation is honouring two stalwarts Mr. K. V. Rangaswamy and Bhishma R. Radhakrishnan who have done yeomen services to the construction industry. He praised their contribution to nation building through their services. He stressed the importance of infrastructure development in the contribution to the GDP growth of the country and appreciated the role played by

L&T in this endeavor. He also dwelt at length about the recent Bill passed in the Parliament regarding the Real Estate Regulation Act (RERA) and said that it is only 'regulation' and not 'strangulation' of the sector.

In his acceptance speech Bhishma R. Radhakrishnan expressed his gratitude to one and all for honouring him with 'Seva Ratna' award during this historic celebration of Platinum Jubilee Concluding Celebrations. Though he wondered whether he was worthy of receiving this award, he accepted the same in view of the love and affection of the institution.

Mr. S. Ramaprabhu proposed a formal vote of thanks. He profusely thanked the Hon'ble Minister Mr. M. Venkaiah Naidu for his participation as Chief Guest and for being present for more than two and half hours inspite of his busy schedule. He profusely thanked the BAI President and Headquarters for giving Southern (Chennai) Centre the golden opportunity for organising Platinum Jubilee Concluding Celebrations. He also thanked Bhishma R. Radhkrishnan for his guidance and support for the success of this event.

On the occasion, all Past Presidents present were honoured by the Platinum Jubilee Concluding Celebrations Organising Committee. On behalf of the Past Presidents, Mr. V. Ramachandran, thanked the Organising Committee of Platinum Jubilee Concluding Celebrations for felicitating them.

Thereafter, Mr. Avinash M. Patil released the 'Special Souvenir' brought out by the Platinum Jubilee Concluding Celebrations Organising Committee to mark the historic occasion and the first copy was received by Mr. Mu. Moahan, Vice President, BAI.

The Platinum Jubilee Concluding Celebrations Organising Committee also honoured the BAI Headquarters Office Bearers and Trustees with Yelachi Garland, Shawl, Turban and were presented with a memento. Mr. Raju John, Executive Secretary, BAI and Mr. S. Madhusudan, Head Communications, BAI were also honoured with Shawl and Memento.

The Centre hosted the Fourth Managing Committee Meeting and Second General Council Meeting for 2016-17 on Sunday, 6th November 2016 at ITC Grand Chola, Guindy, Chennai.

The Centre hosted the ‘Sixth BAI Tamil Nadu State Meeting 2016-17’ on 15th February 2017 at Chennai Trade Centre, Chennai. Mr. M. Thirusangu, State Chairman, BAI Tamil Nadu, Puducherry and Andaman Nicobar, chaired the meeting, Mr. S. Ayyanathan, State Secretary, BAI Tamil Nadu, Puducherry and Andaman Nicobar conducted the proeedings of the meeting. Mr. Mu. Moahan, Vice President, BAI also graced the meeting. Issues concerning the infrastructure construction and real estate industry in Tamil Nadu were taken up during the meeting.

‘BAI Tamil Nadu State Convention 2017’ was organised by Southern (Chennai) Centre on 15th and 16th February 2017 in Chennai Trade Centre. During the inauguration of ‘BAI Tamil Nadu State Convention 2017’, Hon’ble Justice Mr. S. Rajeswaran was the Chief Guest. Mr. Ravi Wig, Member, Central Board of Trustees, EPF and Mr. Raju John, Executive Secretary, BAI, were the Guests of Honour. Mr. M. Thirusangu, State Chairman, BAI Tamil Nadu, Puducherry and Andaman Nicobar gave the Presidential addrees. Mr. Mu. Moahan, Vice President, BAI and Mr. R. Radhakrishnan, Past President & Past Trustee, BAI participated as Special Guests and addressed on the issued faced by the construction fraternity. More than 700 members from all over Tamil Nadu, Puducherry and Andaman Nicobar have participated in the Convention.

On 16th February 2017, the Technical Sessions of the ‘BAI Tamil Nadu State Convention 2017’ were held. The first Session was on ‘Provident Fund’. Mr. Narayanappa, Central Additional Chief Provident Fund Commissioner addressed about Provident Fund. Mr. Kulkarni, Additional Central Provident Fund Commissioner, Tamil Nadu and Kerala also addressed on Provident Fund.

The Second Session was on ‘Goods and Service Tax’ (GST). Mr. C.A. Gopalakrishnaraju, Regional Council Member – ICAI delivered the key note address. Concurrently with ‘BAI Tamil Nadu State Convention 2017’, second edition of BATIMAT 2017 – Construction Materials & Technology Exhibition was organised at Chennai Trade Centre. The Exhibition was held between 16th and 19th February 2017. Around 50 organisations showcased their products in the Exhibition. On the concluding day, 19th February 2017 of the Exhibition, memento was presented to the Exhibitors on behalf of Southern (Chennai) Centre. Telangana State

Mr B Sugunakar Rao was installed as the State Chbairman of Telengana State for 2016-17 on 4th April 2016. Mr Etala Rajender, Hon’ble Minister for Finance, Govt of Telangana was the Chief Guest. Mr Koppula Eshwar, Chief Whip of Govt of Telangana and Mr. Mu. Mohan, Vice President were the Guests of Honour. On the same occasion Chairmen of BAI Centres in Telangana for 2016-17 were also installed namely Mr P Narsimha Rao for Hyderabad Centre, Mr K Devender Reddy for Warrangal Centre; Mr U Surender for Karimnagar Centre, Mr. Soma Srinivas Reddy for Nalgonda Centre, Mr G Balaji for Ranga Reddy Centre; Mr V Bhaskar Reddy for Nizamabad Centre, Mr V Gangadhar for Adilabad Centre, Mr Ch. Srinivasa Rao for Khammam Centre; Mr V Ravinder Reddy for Greater Hyderabad Centre and

Mr L Narsing Rao for Kamareddy Centre. Mr B Sugunakar Rao administered the “Oath of Office” by Mr. Mu Mohan and the newly inducted Chairmen of Centres were administered by Mr B. Seenaiah, Past President. Mr. M Nagesh Reddy- Past State Chairman, Telangana formally handed over charge to Mr B Sugunakar Rao. Mr N Sachitanand Reddy was felicitated on being elected as Trustee of BAI for the term 2016-19.

Thanjavur Centre

Er. B. Anandhan was installed as the Chairman of Thanjavur Centre for 2016-17 by Er. A. K. Yussouf, Past President on 20th April, 2016 alongwith other office bearers. Mr. M. Thirusangu, State Chairman, Tamil Nadu, Pondicherry and Andaman Nicobar also graced the occasion and inducted new BAI members. Members of Thanjavur Centre and their families were present during the function.

Mr Avinash Patil, President visited Thanjavur on 8th Oct 2016. A special meeting of the members of Centre was convened on the occasion. Mr Patil briefed the members about the various steps being taken by BAI to solve problems of real estate and infrastructure construction industry. He and his wife was taken around to the famous temples and historical places. Er B Anandhan, Chairman and his team members and senior functionaries arranged meeting and other things for the President.

Builders’s Day 2016 was celebrated in a fitting manner on 27th November 2016 Er. R. Radhakrishnan, Former National President & Trustee was the Chief Guest and complemented the growth and development of BAI Thanjavur Centre.

He said the Centre was started in 1983 with 21 members and now grown to 310 members in which 192 are Patron members is the wonderful and commendable achievement. He appreciated the unity among members and prayed that the same should continue for ever. Mr. M. Thanasangu, BAI, State Chairman offered felicitation. Senior Engineer and expert in cost effective construction technology, Er. S. Rajendran was honoured and presented with Achievement of Excellence Award.

Past Chairmen of the centre were honoured with shawal. Er. T. Kalyanasundaram, Chairman Builder’s Day Celebration Committee made excellent arrangements. Er. B. Anandan, Centre Chairman presided over the function and Er. R.K. Kumar proposed the vote of thanks in the end. Builder’s day was well attended by members and their family and it will fresh in memory for years to come.

Thiruthuraipoondi Centre

BAI Thiruthuraipoondi Centre was inaugurated on 26th March, 2016. Mr. E. Selvakumar was installed

as the first Chairman of the new Centre for 2016-17 by Mr. R. Radhakrishnan, Past President and Past Trustee, Mr. N. Raghunathan, State Chairman, Tamil Nadu, Pondicherry & Andaman Nicobar (2015-16) was also present on the occasion.

Theni Centre

The Centre organised Installation function held on 28.05.2016 at Vasantha Mahal, Theni.

The Centre organised tour to BAI members to Srilanka from 21.05.2016.

The Centre organised Income Tax Awareness Meeting held on 03.08.2016 at Hotel Western Gatz. Theni. A goods number of members attended Third State Level MC & GC Meeting held on 12 & 13.08.2016 at Coimbatore.

Large number of Members attended Second State Level MC & GC Meeting held on 23 & 24.06.2016 at Pondicherry. The Centre organised Diwali Celebration – Family meet held on 23.10.2016 at Vasantha Mahal, Theni.

During the year, the Centre conducted Three (3) Executive Committee Meetings.

Tiruchirappalli Centre

Builders’ Association of India, Tiruchirappalli Centre’s Installation Function for the year 2016-17 was held at Kalaingar Arivalayam on 17.04.2016. The Chief Guest Shri Krishna Jaganathan, State Co-ordinator. Shri Dharma Rakshana Samithi, highlighted the Importance of life, connected to Building, in an excellent manner. Mr. Mu. Mohan, BAI, Vice President installed the New Team. Mr. M. Thirusangu, State President, addressed the gathering. Mr. A.K. Yousuf, BAI, All India Past President, Released the Monthly Bulletin of our centre “Builders’ Fort” with Mr. D. Damodaran as the Editor.

Mr. A Puhazhendi, All India Past Vice President inducted the New Members. This year we inducted 157 new members and 19 patron members.

The Centre organised a work shop was conducted for the students of Indira Ganesan Engineering College on 03.08.2016. Around 250 students participated. Our Past President A. Puhazhendi gave a lecture, on the construction of multi-storey buildings. We sponsored an industrial study visit to Coimbatore, for these students. BAI Trichy Centre arranged a one day Skill Development Training Programme at Skill Kraft-Skill Training Institute, Mathur, Trichy on 25.09.2016. There were about 65 workers from different categories participating in this programme. High profile and experienced faculty took classes for

programme. High profile and experienced faculty took classes for Civil Masons, Bar Benders and Domestic Electricians.

Thiruvalla Centre Centre felicitated Mr John Paul K. on him being elecdted as State Chairman-Kerala for 2016-17 in a function in Thiruvalla. Mr Navas Attinkara, Chairman did the honour of felicitating Mr John Paul.

Thrissur Centre Dr Ramdas C R was installed as the Chairman for 2016-17 on 23rd April 2016 by Mr John Paul K, State Chairman - Kerala alongwith other office bearers of the Centre. Dr. E Sreedharan was the Chief Guest and was felicitated by Centre. Dr Sreedharan also addressed the gathering.

Tirunelveli Centre

Er. M. Olaganatha Sankar was installed as the Chairman of Centre by Mr. Mu. Mohan, Vice-President alongwith other office bearers of the Centre. Mr. M. Thirusangu, State Chairman, Tamilnadu, Puduchery and Andaman Nicobar and other senior members of the Centre were also present on the occasion.

Vellore Centre Mr C Sridhar was installed as Chairman of the Centre for 2016-017 by Chief Guest Mr Mu Mohan, Vice President alongwith the other office bearers. Mr Arul Jothi Arasan, General Manager, Aavin and Dr S K Sarkar, Dean – School of Civil Engineering, Vellore Institute of Technology were the Guest of Honour. Other senior members were also present and the outgoing Chairman formlly handed over the charge to Mr. Sridhar.

Visakhapatnam Centre Mr. CH. Ramakotaiah was formally installed as State Chairman of BAI Andhra Pradesh for 2016-17 by M. Venkata Rao, Past State Chairman, Andhra Pradesh on 12th April, in Visakhapatnam. Present on the occasion were, Mr. G. V. Ravi Raju, Chairman; Mr. R. Satyanarayana, Imm. Past Chairman; other office-bearers and senior functionaries of the Centre Mr G V Ravi Raju was installed as the Chairman of the Centre by Mr. Ch. Ramakotaiah, State Chairman - AP on 12th April 2016 alongwith other office bearers of the Centre. Out-going Chairman Mr R Satyanarayana formally handed over the charge to the incoming Chairman in the presence other senior members and office bearers of the Centre.

BUILDERS’ ASSOCIATION OF INDIA

Builders’ Association of India (All-India Association of Engineering Construction Contractors & Builders)

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PROXY

Name of the Member I/We, the undersigned of being a member of Builders’ Association of India hereby appoint of or failing him/her of or failing him/her of as my/our proxy to vote for me/us and on my/our behalf at the 76th Annual General Meeting of the Association

being held on on Saturday 22nd July, 2017 at 4.00 P.M. at Hotel Novotel, Hyderabad Airport, Hyderabad. Signed this day of 2017.

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