Chapter IV TAXATION AND FINANCE

Taxes leviable by Gram Panchayats (1) A gram panchayat shall levy in the village,- (a) a House-tax; (b) kolagaram, or katarusum that is to say, tax on the village produce sold in the village by weight measurement or number subject to such rules as may be prescribed; (c) such other tax as the Government may, by notification, direct any gram panchayat or class of gram panchayats to levy subject to such rules as may be prescribed: Provided that no such notification shall be issued and no such rule shall be made except with the previous approval of the Legislative Assembly of the State. (2) A duty shall also be levied on transfers of property situated in the area under the jurisdiction of the gram panchayat in accordance with the provisions of section 69. (3) Subject to such rules as may be prescribed the gram panchayat may also levy in the village,- (i) a vehicle tax; (ii) a tax on agricultural land for a specific purpose; (iii) a land-cess at the rate of two naya paise in the rupee on the annual rental value of all occupied lands which are not occupied by or adjacent and appurtenant to, buildings; (iv) fees for use of porambokes or communal lands under the control of the gram panchayat; (v) fees for the occupation of building including chavadies and sarais under the control of the gram panchayat. (4) Every gram panchayat may also levy a duty in the form of a surcharge on the seigniorage fees collected by the Government on materials other than minerals and minor minerals quarried in the village: Provided that the rate at which such duty shall be levied shall be fixed by the gram panchayat with the previous approval of the Government. (5) Every gram panchayat may, with the previous approval of the prescribed authority also levy, in respect of lands lying within its jurisdiction, a duty in the form of a surcharge at such rate, not exceeding twenty-five naya paise in the rupee, as may be fixed by the gram panchayat,- (a) in the Andhra area, on the land cess, leviable under section 78 of the Andhra Pradesh(Andhra Area) District Boards Act, 1920 (Act XIV of 1920) and on the education tax leviable under section 37 of the Andhra Pradesh Education Act, 1982 (Act 1 of 1982); (b) in the Telangana area, on the local cess leviable under section 135 of the Andhra Pradesh (Telangana Area) District Boards Act, 1955 (Act 1 of 1956) and on the education tax leviable under section 37 of the Andhra Pradesh Education Act, 1982 (Act 1 of 1982). (6) Any resolution of a gram panchayat abolishing an existing tax or reducing the rate at which a tax is levied shall not be carried into effect without the previous approval of the Commissioner.

(1) The house-tax referred to in clause (a) of sub-section (1) of section 60 shall, subject to such rules as may be prescribed, be levied on all houses in the village on any one of the following basis, namely: (a) annual rental value, or (b) capital value, or (c) such other basis as may be prescribed: Provided that no house tax shall be levied on poultry sheds and annexes thereto which are essential for running the poultry farms. (2) The house-tax shall, subject to the prior payment of the land revenue, if any due to the Government in respect of the site of the house be a first charge upon the house and upon the movable property, if any, found within or upon the same and belonging to the person liable to pay such tax. (3) The house-tax shall be levied every year and shall, save as otherwise expressly provided in the rules made under sub-section (1) be paid by the owner within thirty days of the commencement of the year. It shall be levied at such rates as may be fixed by the gram panchayat, not being less than the minimum rates and not exceeding the maximum rates, prescribed in regard to the basis of levy adopted by the gram panchayat. (4) The Government may make rules providing for- (i) the exemption of special classes of houses from the tax; (ii) the manner of ascertaining the annual or capital value of houses or the categories into which they fall for the purposes of taxation; (iii) the person who shall be liable to pay the tax and the giving of notice of transfer of houses; (iv) the grant of exemptions from the tax on the ground of poverty; (v) the grant of vacancy and other remissions; and (vi) the circumstances in which, and the conditions subject to which houses constructed, reconstructed or demolished, or situated in areas included in, or excluded from the village, during any year, shall be liable or cease to be liable to the whole or any portion of the tax. (5) If the occupier of a house pays the house-tax on behalf of the owner thereof, such occupier shall be entitled to recover the same from the owner and may deduct the same from the rent then or thereafter due by him to the owner.

(1) The Government may, by order published in the Andhra Pradesh Gazette, for special reasons to be specified in such order direct any gram panchayat to levy the house-tax referred to in clause (a) of sub-section (1) of section 60 at such rates and with effect from such date not being earlier than the first day of the year immediately following that in which the order is published, as may be specified in the order. Such direction may be issued in respect of all buildings in a gram panchayat or in respect of only such buildings belonging to the undertakings owned or controlled by the State Government or Central Government and the buildings belonging to the State Government as may be specified therein. (2) When an order under sub-section (1) has been published, the provisions of this Act relating to house-tax shall apply as if the gram panchayat had, on the date of publication of such order, by resolution determined to levy the tax at the rate and with effect from the date specified in the order, and as if no other resolution of the gram panchayat under section 60 determining the rate at which and the date from which the house-tax shall be levied, had taken effect. (3) A gram panchayat shall not alter the rate at which the house-tax is levied in pursuance of an order under sub-section (1) or abolish such tax except with the previous sanction of the Government.

Tax on advertisements Every person who erects, exhibits, fixes or retains upon or over any land, building, wall, hoarding or structure any advertisement or who displays any advertisement to public view in any manner whatsoever, in any place whether public or private, shall pay on every advertisement which is so erected, exhibited, fixed, retained, or displayed to public view, a tax calculated at such rates and in such manner and subject to such exemptions as the gram panchayat may with the approval of the [Zilla Praja Parishad] by resolution determine: Provided that the rates shall be subject to the maximum and minimum prescribed by the Government in this behalf: Provided further that no tax shall be levied under this section on any advertisement or a notice,- (a) of a public meeting; or (b) of an election to any legislative body or to the gram panchayat, [Mandal Praja Parishad] or [Zilla Praja Parishad]; or (c) of a candidature in respect of such an election: Provided also that no such tax shall be levied on any advertisement which is not a sky-sign and which,- (a) is exhibited within the window of any building; or (b) relates to the trade or business carried on within the land or building upon or over which such advertisement is exhibited or to any sale or letting of such land or building or any effects therein or to any sale, entertainment or meeting to be held upon or in the same land or building; or (c) relates to the name of the land or building upon or over which the advertisement is exhibited or to the name of the owner or occupier of such land or building; or (d) relates to the business of any railway administration; or (e) is exhibited within any railway station or upon any wall or other property of a railway administration except any portion of the surface of such wall or property fronting any street. Explanation-I : The word "structure" in this section shall include any movable board on wheels used as an advertisement or an advertisement medium. Explanation-II: The expression "sky-sign" shall in this section, mean any advertisement, supported on or attached to any post, pole, standard framework or other support wholly or in part upon or over any land, building, wall or structure which, or any part of which shall be visible against the sky from some point in any public place and includes all and every part of any such post, pole, standard framework or other support. The expression "sky-sign" shall also include any balloon, parachute or other similar device employed wholly or in part for the purposes, of any advertisement upon or over any land, building or structure or upon or over any public place but shall not include - (a) any flagstaff, pole, vane or weathercock unless adopted or used wholly or in part for the purpose of any advertisement; or (b) any sign or any board, frame or other contrivance securely fixed to or on the top of the wall or parapet of any building or on the cornice or on blocking course of any wall or to the ridge of a roof: Provided that such board, frame or other contrivance be of one continuous face and not open work, and does not extend in height more than one metre above any part of the wall or parapet or ridges, to, against or on which it is fixed or supported; or (c) any advertisement relating to the name of the land or building upon or over which the advertisement is exhibited or to the name of the owner or occupier of such land or building; or (d) any advertisement relating exclusively to the business of a railway administration and placed wholly upon or over any railway, railway station, yard, platform or station approach belonging to railway administration and so placed that it cannot fall into any street or public place; or (e) any notice of land or building to be sold or let, placed upon such land or building. Explanation-III: "Public place" shall, for the purpose of this section, mean any place which is open to the use and enjoyment of the public, whether it is actually used or enjoyed by the public or not.

(1) No advertisement shall be erected, exhibited, fixed or retained upon or over any land, building, wall, boarding or structure within the gram panchayat or shall be displayed in any manner whatsoever in any place without the written permission of the executive authority. (2) The executive authority shall not grant such permission, if- (i) the advertisement contravened any bye-law made by the gram panchayat under section 270; (ii) the tax, if any, due in respect of the advertisement has not been paid. (3) Subject to the provisions of sub-section (2) in the case of an advertisement liable to the advertisement tax, the executive authority shall grant permission for the period to which the payment of the tax relates and no fees shall be charged in respect of such permission: Provided that the provisions of this section shall not apply to any advertisement relating to the business of a railway administration erected, exhibited, fixed or retained on the premises of such administration.

The permission granted under section 64 shall become void in the following cases namely:- (a) if the advertisement contravenes any bye-law made by the gram panchayat under section 270; (b) if any addition to the advertisement be made except for the purpose of making it secure under the direction of Engineer of the Panchayat Raj and Rural Development Department or the [Mandal Praja Parishad] Development Officer; (c) if any material change be made in the advertisement or any part thereof; (d) if the advertisement or any part thereof falls otherwise than through accident; (e) if any addition or alteration be made to or in the building, wall or structure upon or over which the advertisement is erected, exhibited, fixed or retained, if such addition or alteration involves the disturbance of the advertisement, or any part thereof; and (f) if the building, wall or structure upon or over which the advertisement is erected, exhibited, fixed or retained, be demolished or destroyed.

Owner or person in occupation to be deemed responsible Where any advertisement is erected, exhibited, fixed or retained upon or over any land, building, wall, hoarding or structure in contravention of the provisions of section 63 or section 64 or after the written permission for the erection, exhibition, fixation or retention thereof for any period has expired or becomes void, the owner or person in occupation of such land, building, wall, hoarding or structure shall be deemed to be the person who has erected, exhibited, fixed or retained such advertisement in such contravention, unless he proves that such contravention was committed by a person not in his employment or under his control or was committed without his connivance.

Removal of un-authorised advertisements If any advertisement is erected, exhibited, fixed or retained contrary to the provisions of section 63, section 66 or after the written permission for the erection, exhibition, fixation or retention thereof for any period has expired or become void, the executive authority may, by notice in writing, require the owner or occupier of the land, building, wall, hoarding or structure upon or over, which the same is erected, exhibited, fixed or retained to take down or remove such advertisement or may enter any building, land or property and have the advertisement removed, and the costs thereof shall be recoverable in the same manner as property tax.

The executive authority may form out of the collection of any tax on advertisement leviable under section 63 for

(1) The duty on transfers of property shall be levied by the Government,- (a) in the form of a surcharge on the duty imposed by the Indian Stamp Act, 1899 (Central Act 2 of 1899) as in force for the time being in the State, on every instrument of the description specified below, in so far as it relates to the whole or part of immovable property as the case may be, situated in the area under the jurisdiction of a gram panchayat; and (b) at such rate as may be fixed by the Government not exceeding five percentum on the amount specified below against such instrument:-

Description of instrument | Amount on which duty shall be levied. (1) | (2) (i) Sale of immovable property. | The amount of value of the consideration for the sale, as setforth in the instrument or the market value of the property which is the subject matter of the sale, whichever is higher. (ii) Exchange of immovable property. | The market value of the property of greater value which is the subject matter of exchange. (iii) Gift of immovable property. | The market value of the property which is the subject matter of the gift. (iv) Mortgage with possession of immovable property. | The amount secured by the mortgage as setforth in the instrument. (v) Lease for a term exceeding one hundred years or in perpetuity of immovable property. | An amount equal to one sixth of the whole amount or value of the rents which would be paid or delivered in respect of the first fifty years of the lease, as setforth in the instrument.

(2) On the introduction of the duty aforesaid- (a) section 27 of the Indian Stamp Act, 1899 (Central Act 2 of 1899) shall be read as if it specifically required the particulars to be set-forth separately in respect of property situated in the area under the jurisdiction of a gram panchayat and in respect of property situated outside such area; and (b) section64 of the same Act shall be read as if it referred to the gram panchayat as well as the Government. (3) The duty levied under this section shall be apportioned among the gram panchayat, Mandal Praja Parishad and the Zilla Praja Parishad concerned in such manner as may be prescribed. (4) The Government shall make rules for regulating the collection of the duty and the apportionment thereof among the gram panchayat, Mandal Praja Parishad and Zilla Praja Parishad concerned and the deduction of any expenses incurred by the Government in the collection thereof. (5) The Government may by order exempt, subject to such conditions and terms as may be specified therein, any instrument or class of instrument from the levy of duty under this section.

The vehicle tax referred to in clause (i) of sub-section (3) of section 60 shall, subject to such rules as may be made in this behalf including rules, relating to the exemptions and restrictions, be levied every year on all vehicles kept or used within the village at such rates as may be fixed by the gram panchayat not being less than the minimum rates and not exceeding the maximum rates prescribed. Explanation: In this section, "vehicle" means a conveyance suitable for use on roads or rails and includes any kind of carriage, cart, wagon, wheel barrows, truck, bicycle, tricycle and rickshaw, but does not include a motor vehicle as defined in the Motor Vehicles Act, 1988 (Central Act 59 of 1988).

Subject to such rules as may be prescribed, a gram panchayat shall levy a special tax on houses at such rates as may be prescribed, to provide for expenses connected with the construction, maintenance, repair, extension and improvement of water or drainage works or the lighting of the public streets and public places, and other similar works.

Subject to such conditions and restrictions as may be prescribed, a gram panchayat may, on application by the owner of a factory or a contiguous group of buildings, permit him to compound all or any of the taxes payable by him under this Act, by paying in lieu thereof such lumpsum amount as may be agreed upon between him and the gram panchayat. Where there is no such agreement the matter may be referred to the Government in the manner prescribed and the Government shall, after giving to the gram panchayat and the owner of the factory or a contiguous group of buildings concerned an opportunity of making a representation, decide the lumpsum amount payable by the owner of the factory or a contiguous group of buildings under this section. The decision of the Government in this regard shall be final.

Power to write-off irrecoverable amounts Subject to such restrictions and control as may be prescribed, a gram panchayat may write off any tax, fee or other amount whatsoever due to it, whether under a contract or otherwise, or any sum payable in connection therewith, if in its opinion such tax, fee, amount or sum is irrecoverable: Provided that where the District Collector or any of his subordinates is responsible for the collection of any tax, fee or other amount due to a gram panchayat, the power to write off such tax, fee or amount or any sum payable in connection therewith on the ground of its being irrecoverable, shall be exercised by the Commissioner of Land Revenue or subject to his control by the District Collector or any officer authorised by him.

(1) All moneys received by the gram panchayat shall constitute a fund called the "Gram Panchayat Fund", and shall be applied and disposed of in accordance with the provisions of this Act and other laws: Provided that the gram panchayat shall credit, subject to such rules as may be prescribed, the proceeds of any tax or fee levied under this Act, to a special fund earmarked for the purpose of financing any specific public improvement. A separate account shall be kept of the receipts into and the expenditure from such special fund. (2) Subject to the provisions of sub-section (1), the receipts which shall be credited to the gram panchayat fund shall include,- (i) the house-tax and any other tax or any cess or fee, levied under this Act; (ii) the proceeds of the duty collected under sub-section (4) of section 60; (iii) the proceeds of the duty on transfers of property levied under section 69 which are paid to the gram panchayat; (iv) any payment made to the gram panchayat by a market committee in pursuance of sub-section (3) of section 11 of the Andhra Pradesh (Andhra Area) Commercial Crops Markets Act, 1933 (Act XX of 1933), or any other law similar thereto for the time being in force; (v) the taxes and tolls levied in the village under sections 117 and 118 of the Andhra Pradesh (Andhra Area) Public Health Act, 1939 (Act III of 1939); or under the corresponding provision of any other law similar thereto for the time being in force in the State; (vi) any payment made to the gram panchayat by the Government under section 13 of the Andhra Pradesh Entertainments Tax Act, 1939 (Act X of 1939); (vii) the amount contributed by the Mandal Praja Parishad to the Gram Panchayat in respect of markets in the village classified as Mandal Praja Parishad markets or paid by the Mandal Praja Parishads to the gram panchayat towards the latter's share of the income derived from such markets as per the apportionment made under section 112 and the amount paid by a Zilla Praja Parishad or any of the joint committees referred to in section 57 to the gram panchayat towards the latter's share of the income derived from a ferry under the management of the Zilla Praja Parishad or joint committee, as the case may be, as per the apportionment made under the said section; (viii) fees for the temporary occupation of village sites, roads and other similar public places or parts thereof in the village; (ix) fees levied by the gram panchayat in pursuance of any provision in this Act, or any rule or other made thereunder; (x) income from endowments and trusts under the management of the gram panchayat; (xi) the net assessment on service inams which are resumed by Government after the commencement of this Act; (xii) income derived from village fisheries, vested in the gram panchayat including the woods and reeds; (xiii) income derived from ferries under the management of the gram panchayat; (xiv) unclaimed deposits and other forfeitures; (xv) the seigniorage fees collected by the Government every year from persons permitted to quarry in the village for materials including minor minerals other than major minerals; (xvi) all income derived from porambokes which vest in the gram panchayat or the user of which is regulated by the gram panchayat and also the penalty and penal assessment if any, levied in respect of unauthorised occupation thereof under any law for the time being in force; (xvii) all income derived from trees standing on porambokes although the user of the porambokes is not vested in the gram panchayat; (xviii) income from leases of Government property obtained by the gram panchayat; (xix) a sum equivalent to one-tenths of the gross income derived by the Government every year from fines imposed by Magistrates in respect of offences committed in the village under this Act, or any rule or bye-law made thereunder or any other provision of law which is prescribed in this behalf; (xx) grants received from the Government, the Zilla Praja Parishad or Mandal Praja Parishad; (xxi) income from investments of amounts taken from the gram panchayat fund; (xxii) all other receipts accruing from the sources of gram panchayat revenue specified in this Act; and (xxiii) all sums other than those enumerated above which arise out of, or are received in aid-of, or for expenditure on any institutions or services maintained or financed from the gram panchayat fund or managed by the gram panchayat. (3) All moneys received by the gram panchayat shall be lodged in the nearest Government treasury. Provided that the amounts received as funds under the Jawahar Rozgar Yojana Employment Assurance Scheme or other Wage Employment Schemes shall be lodged in nearby Nationalised Banks or Co-operative Banks or Post Offices in such manner as may be prescribed. (4) All orders or cheques against the Gram Panchayat Fund shall be signed by such authority as may be prescribed.

Expenditure, from Gram Panchayat Fund (1) The purposes to which the gram panchayat fund may be applied include all objects expressly declared obligatory or discretionary by this Act or any rules made thereunder or by any other laws or rules and the fund shall be applicable thereto within the village subject to such rules or special orders as the Government may prescribe or issue and shall, subject as aforesaid, be applicable to such purposes outside the village if the expenditure is authorised by this Act or specially sanctioned by the Commissioner. (2) (a) It shall be the duty of every gram panchayat to provide for the payment of,- (i) any amounts falling due on any loans contracted by it; (ii) the salaries and allowances and the pensions, pensionary contributions and provident fund contributions of its officers and servants; (iii) sums due under any decree or order of a court; (iv) contributions, if any, levied by the Mandal Praja Parishad subject to such limits as may be specified by Commissioner; (v) any other expenses rendered obligatory by or under this Act or any other law. (3) A gram panchayat may, with the sanction of the Government, contribute to any fund for the defence of India. (4) A gram panchayat may, with the sanction of the Commissioner, also- (i) contribute towards the expenses of any public exhibition, ceremony or entertainment in the village; (ii) contribute to any charitable fund, or to the funds of any institution for the relief of the poor or the treatment of diseased or infirmity or the reception of diseased or infirm persons or the investigation of the causes of disease; (iii) contribute to the funds of any institution established for promoting community development or the aims of Panchayat Raj; and (iv) defray any other extraordinary charges.

The cost of the preparation and revision of the electoral roll, the cost of the election expenses, including the conduct of elections to the gram panchayat and the cost of maintenance of election establishment employed in connection therewith, shall be borne by the Government.

(1) The executive authority shall in each year frame before the prescribed date and place before the gram panchayat or, the budget showing the probable receipts and expenditure during the following year and the gram panchayat shall, within one month of the date on which the budget is placed before it, sanction the budget with such modifications, if any, as it thinks fit: Provided that if for any reasons, the budget is not sanctioned by the gram panchayat under this sub-section before the expiration of the period of one month aforesaid, the executive authority shall submit the budget to the Divisional Panchayat Officer, who shall sanction it with such modifications, if any, as he thinks fit. (2) Where the budget is sanctioned by the gram panchayat it shall be forwarded by the executive authority on or before such date as may be prescribed to the Divisional Panchayat Officer. The Divisional Panchayat Officer shall make such suggestions or modifications as he may deem fit within one month from the date of its receipt and return it to the gram panchayat which shall consider the same and approve the budget with or without modifications, at a special meeting convened for the purpose; and the Budget so approved at such meeting shall be final. (3) If in the course of a year a gram panchayat finds it necessary to alter figures shown in the budget with regard to its receipts or to the distribution of the amounts to be expended on the different services undertaken by it, a supplemental or revised budget may be framed, sanctioned, submitted and modified in the manner provided in sub-sections (1) and (2).

If the expenditure incurred by the Government or by any other gram panchayat or the Mandal Praja Parishad or Zilla Praja Parishad or by any other local authority in the State for any purpose authorised by or under this Act is such as to benefit the inhabitants of the village, the gram panchayat may, with the sanction of the Commissioner, and shall, if so directed by him, make a contribution towards such expenditure.

Recovery of loans and advances made by the Government (1) Notwithstanding anything in the Local Authorities Loan Act, 1914 (Central Act 9 of 1914), or any other law similar thereto for the time being in force, the Government may- (a) by order direct any person having custody of the gram panchayat fund to pay to them in priority to any other charges against such fund, except charges for the service of authorised loans, any loan or advance made by them to the gram panchayat for any purpose to which its funds may be applied under this Act; (b) recover any such loan or advance by suit. (2) The person to whom the order referred to in clause (a) of sub-section (1) is addressed shall be bound to comply with such order.