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PART-2-WHICH INSTITUTIONS ARE INCLUDED in LOCAL AUTHORITY in GST-MUNICIPALITY Posted on June 2, 2018

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PART-2-WHICH INSTITUTIONS ARE INCLUDED in LOCAL AUTHORITY in GST-MUNICIPALITY Posted on June 2, 2018 PART-2-WHICH INSTITUTIONS ARE INCLUDED IN LOCAL AUTHORITY IN GST-MUNICIPALITY Posted on June 2, 2018 By CA Dr. Arpit Haldia Page: 1 Email: [email protected] Today’s update would be discussing about the Institutions covered under Municipality under the definition of Local Authority provided under clause (69) of section 2 of CGST Act, 2017. Just Like “Panchayat”, Municipality is also a word which covers Institutions across small cities to the large cities. Let’s try to analyse the term and its coverage of the Institutions:- 1. Definition of Municipality: The definition provides that Municipality shall mean Institution as defined in clause (e) of Article 243P of the Constitution. Clause (e) of Article 243P of the Constitution defines Municipality as follows: (e) Municipality means an institution of self government constituted under Article 243Q 2. Constituion of Municipality: Article 243Q of the Constitution provides that 243Q. Constitution of Municipalities (1) There shall be constituted in every State, (a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area (b) a Municipal Council for a smaller urban area; and (c) a Municipal Corporation for a larger urban area, in accordance with the provisions of this Part: (2) In this article, a transitional area, a smaller urban area or a larger urban area means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part. Article 243Q of the Constitution of India provides that Nagar Panchayat, Municipal Council and Municipal Corporation shall be established in every State. Transitional Area, smaller urban area and larger urban area would be notified by the Governor having regard to the 1. population of the area, 2. the density of the population therein, 3. the revenue generated for local administration, 4. the percentage of employment in non agricultural activities, 5. the economic importance or 6. such other factors as he may deem fit Nagar Panchayat is commonly known as Nagar Palika. Muncipal Council is commonly known as Nagar Parishad. Municipal Corporation is commonly known as Nagar Nigam or Mahanagar Palika. Particulars Area Nagar Panchayat/Nagar Palika Transition Area between Rural and Urban Municipal Council/Nagar Parishad Smaller Urban Area By CA Dr. Arpit Haldia Page: 2 Email: [email protected] Municipal Corporation/Nagar Nigam/Mahanagar Palika Large Urban Area For Example Rajasthan has 7 Municipal Corporations/Nagar Nigam, 33 Municipal Councils/Nagar Parishad and 147 Municipal Board/Nagar Palika/Nagar Panchayat. Some of the Examples are as follows: Particulars Nagar Nigam Jaipur, Jodhpur Nagar Parishad Barmer, Jaisalmer Nagar Palika Balotara, Sanchore Sumerpur 3. Functions of Municipalities: Article 243W of the Constitution of India details out the functions and responsibilities of Municipalities in India as follows: 243W. Powers, authority and responsibilities of Municipalities, etc:- Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to (i) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule. Municipalities are devolved with power and responsibilities with respect to performance of other functions including those in relation to the matters listed in Twelfth Schedule. The Twelfth Schedule to the constitution lists out following matter: 1. Urban planning including town planning. 2. Regulation of land-use and construction of buildings. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply for domestic, industrial and, commercial purposes. 6. Public health, sanitation conservancy and solid waste management. 7. Fire services. 8. Urban forestry protection of the environment. and promotion of ecological aspects. 9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. 10. Slum improvement and upgradation. 11. Urban poverty alleviation. By CA Dr. Arpit Haldia Page: 3 Email: [email protected] 12. Provision of urban amenities and facilities such as parks, gardens, play-grounds. 13. Promotion of cultural, educational and aesthetic aspects. 14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums. 15. Cattle ponds; prevention of cruelty to animals. 16. Vital statistics including registration of births and deaths. 17. Public amenities including street lighting, parking lots, bus stops and public conveniences. 18. Regulation of slaughter houses and tanneries. The lists of above activities amongst other reasons gains importance from the perspective of Entry No. 3 of Notification No. 12/2017 dated 28th June 2017 which exempts pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. 5. Source of Revenue of Municipality: Article 243X of the Constitution of India details out the Sources of Income of Municipality in India as follows: 243X. Power to impose taxes by, and funds, of, the Municipalities: The Legislature of a State may, by law (a) authorise a Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits; (b) assign to a Municipality such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits; (c) provide for making, such grants in aid to the Municipalities from the Consolidated Fund of the State; and (d) provide for constitution of such Funds for crediting all moneys received respectively, by or on behalf of the Municipalities and also for the withdrawal of such moneys therefrom, as may be specified in the law Next update would discuss about Municipal Committee and Cantonment Board. By CA Dr. Arpit Haldia Page: 4 Email: [email protected].
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