THE PUNJAB MUNICIPAL CORPORATION LAW (EXTENSION TO CHANDIGARH) AMENDMENT ACT, 2017

The Punjab Municipal Corporation Law (Extension to Chandigarh) Amendment Act, 2017 was introduced by the minister of finance at that time Mr. Arun Jaitley in Lok Sabha on July 1, 2017.  It replaces the Punjab Municipal Corporation Law (Extension to Chandigarh) Amendment Ordinance, 2017. It seeks to amend the Punjab Municipal Corporation Law (Extension to Chandigarh) Act, 1994 which came into force for the establishment of Municipal Corporation in certain cities in parts of Punjab. The 1944 Act, extended the provision of the Punjab Municipal Corporation Act, 1976 to Union territory of Chandigarh. 

1. In the Punjab Municipal Corporation Law (Extension to Chandigarh) Act, 1994, in part II of Schedule, in section 90 the following amendments have been made

1. To substitute clause (a)

In sub-section (1)

1. Omit clauses (b) and (c). 
2. in clause (e), the word "and" occurring at the end, shall be omitted 
3. After clause (f), clause (g) “a tax on entertainments and amusements” shall be inserted.

To substitute clause (b) 

In sub-section (6) 

1. After "Punjab Motor Vehicles Taxation Act, 1924," the words "as applicable to the Union Territory of Chandigarh", shall be inserted.'
2. Omit clauses (d) and (e). 

2.  The Punjab Municipal Corporation Law (Extension to Chandigarh) Amendment Ordinance, 2017 is hereby repealed. Notwithstanding such repeal, anything done or any action is taken under the Punjab Municipal Corporation Law (Extension to Chandigarh) Act, 1994, as amended by the said Ordinance, shall be deemed to have been done or taken under the corresponding provisions of the said Act, as amended by this act.

The Punjab Municipal Corporation Law (Extension to Chandigarh) Amendment Act, 2017 has brought some of the significant changes in the principal act. To bring uniform tax structure throughout the country section 90 of the Punjab Municipal Corporation Act, 1994 had to be amended. Under section 90 of the act, the central government had the power to levy Entertainment tax and Entertainment Duty for Chandigarh. The amendment act transferred these powers from the central government to the Municipal Corporation of Chandigarh. In this case of union territories, the union territory of Chandigarh was levying tax on amusement and entertainment. To achieve the uniformity of the tax structure, this provision had to be amended by transferring these powers to the Municipal Corporation. This amendment is in accordance with constitution 101st amendment Act, 2016 (GST) which includes Entertainment Tax within the ambit of GST, except where a panchayat or municipality levies it. Changes to the power to levy Octroi were also made under this amendment act. To talk about Octroi, it is a local tax which is collected on various goods brought into the district for consumption. Before the amendment was enacted, the municipal corporation of Chandigarh had the power to levy Octroi and taxes on vehicles and animals. These powers have been removed under the current act. The municipalities and the Panchayati raj institutions are the pillars and primary units of democracy. As in this case the more these pillars are strengthened, the stronger would be our democracy and the only way to do that is decentralizing the power to make this institution more strong for the working of the betterment of the society and so that they can be answerable to the people and so that their hopes and needs can be met. This amendment is also in accordance with the constitution 101st amendment act, 2016 GST which encompasses entry tax, including Octroi, within the ambit of GST.   

The government has come up with this small piece of legislation to bring amends to Punjab Municipal Corporation (Extension to Chandigarh) Act, 1994 as a consequential effect of the Constitution (One Hundred and First Amendment) Act, 2016. It seeks to transfer these powers from the central government to the municipal corporation of Chandigarh by way of introducing this act. The amendment was made to achieve decentralization of powers which would strengthen our existing democratic system as the local self-governed institutions are the potential medium for the successful working of democracy and meet the interests of the society at large.