Finance Act – 1971

Arrangement of Sections

1. Short title.

PART I

Compulsory Savings Fund

2. Money in the Compulsory Savings Fund to be loaned to the Government.

3. Certain expenses to be met out of the Compulsory Savings Fund.

4. Interpretation.

PART II

Financial Control of Public Corporations

5. Application of provisions of this Part of this Act.

6. Effective date for implementation of this Part of this Act.

7. Financial obligations of a Public Corporation.

8. Preparation of budgets of Public Corporations.

9. Revenue and determination of net surplus and net deficit.

10. Appropriation of net surplus revenue of a Public Corporation.

11. Investment of moneys of a Public Corporation.

12. Accounts of a Public Corporation.

13. Rendering of accounts and audit.

14. Accounts and reports to be laid before the House of Representatives.

15. Recommendations of the Public Accounts Committee.

16. Borrowing powers of a Public Corporation.

17. Subsidies from the Government.

18. Reduction of capital of a Public Corporation.

19. Dissolution of a Public Corporation.

20. Liquidator's powers.

21. Closure of liquidation.

22. Interpretation.

PART III

Financial Year of the Government and of Public Institutions

23. Financial year of Government and of public institutions.

24. Interpretation.

PART IV

Establishment of Special Funds to Receive Voluntary Contributions in Money Made to the Government for Charitable Purposes

25. Establishment of special deposit accounts to receive voluntary contributions in money made to the Government for specified charitable purposes.

26. Payments from deposit accounts.

PART V

Amendments to the Motor Traffic Act

27. Date of operation of section 28.

28. Amendment of section 240 of the Motor Traffic Act.

28A. Minister may by notification alter date before which applications for revenue licences shall be made.

29. Levy of penalty for failure to pay licence fees on due date.

PART VI

Amendments to the Foreign Exchange Amnesty Act, No. 1 of 1971

30. Amendments to Act, No. 1 of 1971.

31. Retrospective effect of amendments.

7 of 1974,

38 of 1971,

14 of 1983.

AN ACT to enact the provisions of law necessary to give legal force to certain proposals, financial or otherwise, contained in the budget speech of the Minister of Finance for the year 1970–71, and to provide for other matters connected therewith or incidental thereto.

[Date of Commencement: 19th October, 1971]

1. Short title.

This Act may be cited as the Finance Act.

PART I

Compulsory Savings Fund

2. Money in the Compulsory Savings Fund to be loaned to the Government.

Notwithstanding the provisions of any law to the contrary, the Monetary Board of the Central Bank shall lend to the Government the moneys lying in the Compulsory Savings Fund on such terms as may be determined by that Board with the concurrence of the Minister of Finance. Any moneys received by way of interest from such lending shall be credited to that Fund.

3. Certain expenses to be met out of the Compulsory Savings Fund.

The expenses incurred in the administration of the Compulsory Savings Fund, the interest payable in terms of section 20 of the Compulsory Savings Act, No. 6 of 1971, the repayments of contributions made to that Fund and refunds of amounts paid in excess of contributions to that Fund, shall be met out of that Fund:

Provided, however, that where at any time the balance in the Compulsory Savings Fund is insufficient to meet any such payment, the money necessary to meet such payment shall be charged on the Consolidated Fund.

4. Interpretation

In this Part of this Act, "Compulsory Savings Fund” means the Compulsory Savings Fund established under section 2 of the Compulsory Savings Act, No. 6 of 1971.

PART II

Financial Control of Public Corporations

5. Application of provisions of this Part of this Act.

(1) The provisions of this Part of this Act shall apply to every Public Corporation notwithstanding anything to the contrary in the provisions of any other written law:

Provided, however, that the Minister of Finance may from time to time, by Order published in the Gazette, exempt any Public Corporation from all the provisions of this Part of this Act, or from any such provisions as shall be specified in the Order.

(2) Any Order published in the Gazette by the Minister of Finance under subsection (1) may be amended, revoked or replaced by a like Order.

(3) Any Order published in the Gazette by the Minister of Finance under the preceding provisions of this section shall come into operation on the date of such publication, or on such later date as may be specified therein.

6. Effective date for implementation of this Part of this Act.

A Public Corporation shall give effect to the provisions of this Part of this Act from the date of commencement of the financial year 1973 or, if possible, earlier.

7. Financial obligations of a Public Corporation.

(1) It shall be the duty of the governing body of a Public Corporation to conduct the business of the Corporation so that the ultimate surpluses on revenue account shall at least be sufficient to cover the ultimate deficits on such account over a period of five years or such other period as may be determined by the Minister of Finance. In determining the ultimate surplus or ultimate deficit for each year under this section, there shall be charged against the revenue account the charges specified in section 9 and the appropriations specified in section 10.

(2) Subsidies which may be received by a Public Corporation from the Government in terms of section 17 shall be included in the revenue of the Corporation in arriving at the surplus or deficit in any year.

8. Preparation of budgets of Public Corporations.

(1) Every Public Corporation shall prepare a budget in respect of every financial year and such budget shall be approved by the governing body of such Corporation not later than three months prior to the commencement of the financial year to which the budget relates.

(2) Notwithstanding the approval of the budget by the governing body of a Public Corporation, no commitments of capital expenditure provided in such budget in excess of five hundred thousand rupees shall be incurred by such Corporation except—

(a) in any case where the appropriate Minister is the Minister of Planning, with the prior approval of the appropriate Minister given with the concurrence of the Minister of Finance; or

(b) in any case where the appropriate Minister is not the Minister of Planning, with the prior approval of the appropriate Minister given with the concurrence of both the Minister of Planning and the Minister of Finance.

(3) The budget of a Public Corporation shall give projections of revenue and expenditure both recurrent and capital, financial resources, investments of funds, cash resources and other relevant information. Such budget shall show a budgeted profit and loss account or income and expenditure account for each financial year and a projected balance sheet showing the position at the end of that year. The form and manner in which the budget shall be prepared, and the minimum information that the budget shall contain, shall be as determined in any case where—

(a) the appropriate Minister is the Minister of Finance, by the appropriate Minister; or

(b) the appropriate Minister is not the Minister of Finance, by the appropriate Minister with the concurrence of the Minister of Finance.

(4) A Public Corporation shall forward copies of its budget to the Ministry of the appropriate Minister, the Ministry of Finance and the Ministry of Planning immediately after the budget has been approved by the governing body of the Corporation.

9. Revenue and determination of net surplus and net deficit.

(1) The revenue of a Public Corporation in any year shall consist of moneys received and accrued in like exercise, performance or discharge of its powers, duties or functions in respect of—

(a) the sale of its products and services;

(b) any subsidies received in terms of section 17; and

(c) other sundry income including profit from the sale of capital assets.

(2) For the purpose of determining the net surplus or net deficit in any year of a Public Corporation, the following charges shall be set off against its revenue—

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