Revenues of Revenues of P.R.Institutions of P.R.Institutions of

Andhra PradeshAndhra Pradesh

Profile of Panchayats in Andhra PradeshProfile of Panchayats in Andhra Pradesh

District Panchayats (Z.P) - 22

Intermediate Panchayats (MP) - 1098

Village Panchayats (GP) - 21807

Panchayat Finance in Andhra Panchayat Finance in Andhra

PradeshPradesh Under the provisions of AP PR Act1994 ,Only

the Gram Panchayats are empowered to levy & collect taxes.

The ZP/MP have no taxation powers. However the ZP/MP get some revenue through

Rents/ Leases etc.

Panchayat Fund

All the money received by PRIs. is constituted into Panchayat fund.

Panchayat fund consists of

1.Own Revenues (Taxes & Non.Taxes etc.,)  2. Assigned Revenues (Transfer duty, Entertainment

Tax)  3. Grants (Central & State)

i) Untied grants (General purpose grants) ii) Tied grants (Specific purpose grants)

Revenue Structure of PRIsRevenue Structure of PRIs Own Revenue:

a) Mandatory Taxes1. House tax

2. Tax on Advertisement

3. Special taxes on Housesi. Drainage tax

ii. Lighting tax

iii. Water tax

b)b) Optional TaxesOptional Taxes

1. Vehicle tax

2. Tax on Agricultural land

3. vacant land tax

c)c) Non-Taxes – Fees and FinesNon-Taxes – Fees and Fines1. Licence fee (Trades & Business)

2. Encroachment fee

3. Layout fee

4. Permission fee for Buildings

5. Monthly fee on Tap connections

6. Fines

7. Fishery Rentals

8. Ferry Rents

House taxHouse tax House tax is levied on the basis of Annual Rental value

or capital value basis

Prior to 2000-2001 general revision of house tax was done once in 5 years. From 2000-2001 onwards house tax is increased at a flat rate of 5% every year.

Special Tax on HousesSpecial Tax on Houses

Gram Panchayats levy special taxes on houses, in the shape of water, drainage & lighting tax

In addition to this 8 Ps in every rupee is collected towards library cess

Library cess amount collected is transferred to Department of Libraries

Rates of Special TaxesRates of Special Taxes

Government has issued orders in 2002 for collection of actual expenditure on lighting, water etc., as to cover O&M cost as user charges.

Nature of taxMaximum

rateMinimum

rate

a) Water supply -- 20%

b) Lighting tax 10% 5%

c) Drainage tax 15% 10%

Rates of House TaxRates of House Tax

Buildings exempted from House Tax: Cattle Pounds Cattle Sheds Poultry Sheds Dairy Sheds Buildings of Union Government NGO’s home

Basis of levyMinimum Rate PA

Maximum Rate PA

On capital value basis (CV) 1/8 % of CV 1% of CV

On annual rental value basis (ARV) 2% of ARV 20% of ARV

Advertisement TaxAdvertisement Tax

The advertisement tax is collected by the Gram Panchayats on every advertisement which is erected , exhibited or displayed to public view.

This tax is not collected on any advertisement or notice relating to Public meetingBusiness of railway administrationElection related matters

Rates of Advertisement TaxRates of Advertisement Tax

Sl. No.

ParticularsMaximum

amount per annum

1 Non illuminated:

a. Space upto 1 Sq. Mtr 4.50

b. For a space over 1.00 Sq. Mtr 9.25

c. For every additional 2.50 Sq. Mtr or part thereof

6.75

2 Illuminated:

a. For a space upto 5.00 Sq.Mtrs 32.50

b. For every additional 5.00 Sq.Mtrs. 32.50

In Rupees

Vehicle TaxVehicle Tax

Vehicle tax is collected by the Gram Panchayats on any kind of carriage, car, bicycle, rickshaw, etc., other than motor vehicles. The rates are indicated below.

Description of Vehicle Maximum Tax Minimum Tax

Four-wheeled vehicle drawn by animals 50.00 20.00

Two-wheeled vehicle drawn by animals 20.00 10.00

Bicycle 10.00 5.00

This tax is more in the nature of regulatory measure, rather than a revenue yielding sources

In Rupees

Assigned revenuesAssigned revenues The assigned revenues of Panchayats are (2) types

Tax revenue or revenue assignments Profession tax Entertainment tax

Tax supplement or revenue sharing Surcharge on stamp duty Seigniorage fees Water cess

Profession taxProfession tax

Upto 1987 profession tax was collected by Gram Panchayats

From 1987 profession tax is collected by commercial tax department

95% of profession tax collected is passed on the local bodies by making provision in PR budget

The amount is distributed to Gram Panchayats on Per capita basis

Entertainment TaxEntertainment Tax

Entertainment tax is collected under AP Entertainment Tax Act, 1939

90% of the proceeds of tax collection is adjusted to Gram Panchayat, Mandal Parishads in the ratio of 60:40

of the 10% balance, 3% is credited to film development corporation and 7% is retained by Government as Estt. Charges

Surcharge on stamp dutySurcharge on stamp duty

PRIs are allowed Transfer duty (Surcharge on stamp duty) @2% on the value of transaction over and above stamp duty of 7% and registration fee of 0.5%.

This transfer duty assigned to Gram Panchayat, Mandal Parishad and Zilla Parishads in the ratio of 60:20:20

Seigniorage fee

Seigniorage fee (Cess on Minor Minerals) is collected by Mines & Geology department

  Sand Auctions are however being conducted at

District level

Seigniorage fee collected by Mines department is adjusted to State funds

  Seigniorage fee is released to Panchayat Raj

Institutions through budgetary provision

The Apportionment is

Zilla Parishad 25%

Mandal Parishad 50%

Gram panchayat 25%  Seignior age fee is released only to those Gram Panchayats from where actual Mining was done

General purpose grants (Untied grants)

1. Per Capita Granta) Zilla Parishad @ Rs.4/-b) Mandal Parishad @ Rs.8-c) Gram Panchayat @ Rs.4/-

2. Incentive Grants for Tax collection

3 Incentive Grants for Unanimous Election

Grants – in -aid 

a)   Salary grantb)   Honorarium & TA to non officialsc) Per Capita grantd)   BRGFe)   Central /State Finance Commission grant f)     Engineering grants i) Rural Water Supply

ii) Rural Sanitation iii) Roads & Bridges

iv) School buildings etc.,

The General funds of PRIs consist of :

a) Taxes & Non-Taxes.

b) Assigned Revenues.

c) General Purpose grants (Untied funds).

General funds of PRIs.

Utilisation of General Funds The Zilla Parishad / Mandal parishad general funds are utilized for

  1. Maintenance of existing Assets 34%

2. Development of SCs 15%

3. Development of STs 6%

4. Development of Women & Children 15%

5. Office Administration 16%6. Drinking Water in emergencies 9%

7. Contingencies 4% ---------------

Total: 100% ---------------

Under the provisions of AP.PR Act, 1994 all the funds received by the Panchayats are to be lodged in the Govt. Treasury only.

The funds are kept in separate deposit accounts under the head

8448 - Deposits of Local FundMH(109) - Panchayat fundsSH(01) - G.P. fundsSH(02) - M.P. fundsSH(03) - Z.P. funds001 - General funds002 - Education funds005 - Spl.Development funds

Lodging of funds:

The Panchayat funds lodged in Treasury are categorized as Lapsable funds and Non-lapsable funds.

The General funds of PRIs are Non-lapsable.

The Salaries and TA grants are lapsed in the same financial year.

The specific purpose grants released during a financial year are available for utilisation till the end of next financial year.

The Treasury authorities will credited back to Government the unspent balances as on 31st March which are lapsed out of Lapsable grants.

Categorization of funds at Treasury:

With effect from 01.04.2001 the grants meant for works programme in respect of Zilla Parishads are released to Pay & Accounts Officer.

The accounts are maintained by the P.A.O. and bills are paid after pre-audit.

However, the Receipts and Expenditure of Engineering grants are incorporated in the Budget and the Annual Accounts of Zilla Parishads.

Z.P. Engineering funds:

  Financial Statements

The Executive Officer place before the General Body quarterly a statement of Financial position. This contains

a. Balance under each Account b. The amount of outstanding bills pending paymentc. The demand collection & balance of own revenuesd. The amount of estimated expenditure for the

remaining months of the year e. This will help the Panchayats to know its financial position and plan its activities.

AUDIT The statutory Auditor of Panchayat Raj Institutions is

the Director State Audit

The Statutory Auditor has the power to surcharge the loss for irregular payments against the officer responsible

The Director of State Audi works under the Technical supervision and control of C & AG

In addition to statutory audit the Accountant General also conduct Test Audit