Punjab Municipal Fund Act, 2006

No: 27 Dated: Oct, 16 2006

The Punjab Municipal Fund Act, 2006

(Punjab Act No. 27 of 2006)

    An Act to assign to the Municipalities amount of tax, levied and collected under the Punjab Value Added Tax Act, 2005, and to provide for the constitution of the Punjab Municipal Fund with a view to compensate the Municipalities for the loss of revenue, suffered due to the abolition of octroi in the State of Punjab and for the matters connected therewith or incidental thereto.

    Be it enacted by the Legislature of the State of Punjab in the Fifty- seventh Year of the Republic of India as follows :-

1. Short title and commencement - (1) This act may be called the Punjab Municipal Fund Act, 2006.

(2) It shall be deemed to have come into force on and with effect from the first day of September, 2006.

2. Definitions - In this Act, unless the context otherwise requires -

(a) "Director" means the Director, Local Government, Punjab;

(b) "Fund" means the Punjab Municipal Fund, constituted under section 3 of this Act;

(c) "Municipality" means an institution of self-government constituted under Article 243Q of the constitution of India;

(d) "prescribed" means prescribed by rules made under this Act;

(e) "State Government" means the Government of the State of Punjab in the Department of Local Government; and

(f) "tax" means a tax levied and collected under the Punjab Value Added Tax Act, 2005 (Punjab Act No. 8 of 2005).

3. Constitution of the Fund - (1) There shall be constituted a Fund, to be called the Punjab Municipal Fund, which shall vest in the State Government.

(2) Eleven per cent of the amount of tax collected, shall be credited direct of the Fund:

Provided that the amount, so credited to the Fund, shall not be less than Rs. 550 crores (Rupees five hundred fifty crores only) per annum or proportion thereof :

Provided further that in the event of the amount credited to the Fund under sub-section (2) falling short of Rs. 550 crores (Rupees five hundred fifty crores only) or a proportion thereof, the State Government shall make it up by giving the amount so failing short as grant-in-aid.

4. Object and administration of the Fund - (1) The Fund shall be utilised to compensate the Municipalities for the loss of revenue, suffered by them due to the abolition of octroi, levied and collected under the Punjab Municipal Act, 1911 and the Punjab Municipal Corporation Act, 1976.

(2) The Fund shall be administered by the Director under the superintendence and control of the State Government.