(1) Subject to rules, if any, that may be made under this Act, and regard being had to the fact that the Authority itself provides in the areas within the jurisdiction of any local authority all or any of the amenities which the local authority provides, then the Authority shall not be liable to pay the taxes including property taxes, if any, but it shall be lawful for the local authority to arrive at an agreement with the Authority, with the prior sanction of the State Government, to receive a lump sum contribution from the Authority in lieu of all or any of the taxes levied or services rendered by the local authority.
(2) Where no such agreement as is referred to in sub-section (1) can be reached, the matter may be referred to the State Government and the State Government may, after giving to the local authority and the Authority a reasonable opportunity of being heard, decide the amount of such contribution. The decision of the State Government shall be binding on both parties.