269. Taxes levied and collected by the Union but assigned to the
States.—1[
(1) Taxes on the sale or purchase of goods and taxes on the
consignment of goods 2[except as provided in article 269A] shall be levied and
collected by the Government of India but shall be assigned and shall be deemed
to have been assigned to the States on or after the 1st day of April, 1996 in the
manner provided in clause
(2).
Explanation.—For the purposes of this clause,—
(a) the expression "taxes on the sale or purchase of goods" shall
mean taxes on sale or purchase of goods other than newspapers, where
such sale or purchase takes place in the course of inter-State trade or
commerce;
(b) the expression "taxes on the consignment of goods" shall mean
taxes on the consignment of goods (whether the consignment is to the
person making it or to any other person), where such consignment takes
place in the course of inter-State trade or commerce.
(2) The net proceeds in any financial year of any such tax, except in so
far as those proceeds represent proceeds attributable to Union territories, shall
not form part of the Consolidated Fund of India, but shall be assigned to the
States within which that tax is leviable in that year, and shall be distributed
among those States in accordance with such principles of distribution as may be
formulated by Parliament by law.]
3
[
(3) Parliament may by law formulate principles for determining when a
4
[sale or purchase of, or consignment of goods] takes place in the course of
inter-State trade or commerce.]
5
[269A. Levy and collection of goods and services tax in course of
inter-State trade or commerce.—
(1) Goods and services tax on supplies in
the course of inter-State trade or commerce shall be levied and collected by the
Government of India and such tax shall be apportioned between the Union and
the States in the manner as may be provided by Parliament by law on the
recommendations of the Goods and Services Tax Council.
______________________________________________
1. Subs. by the Constitution (Eightieth Amendment) Act, 2000. s. 2, for cls.
(1) and
(2)
(w.e.f. 9-6-2000).
2. Ins. by the Constitution (One Hundred and First Amendment) Act, 2016 s. 8,
(w.e.f. 16-9-2016).
3. Ins. by the Constitution (Sixth Amendment) Act, 1956, s. 3 (w.e.f. 11-9-1956).
4. Subs. by the Constitution (Forty-sixth Amendment) Act, 1982. s. 2, for "sale or
purchase of goods" (w.e.f. 2-2-1983).
5. Ins. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 9
(w.e.f. 16-9-2016).
155 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
Explanation.—For the purposes of this clause, supply of goods, or of
services, or both in the course of import into the territory of India shall be
deemed to be supply of goods, or of services, or both in the course of inter-
State trade or commerce.
(2) The amount apportioned to a State under clause
(1) shall not form
part of the Consolidated Fund of India.
(3) Where an amount collected as tax levied under clause
(1) has been
used for payment of the tax levied by a State under article 246A, such amount
shall not form part of the Consolidated Fund of India.
(4) Where an amount collected as tax levied by a State under article
246A has been used for payment of the tax levied under clause
(1), such
amount shall not form part of the Consolidated Fund of the State.
(5) Parliament may, by law, formulate the principles for determining the
place of supply, and when a supply of goods, or of services, or both takes place
in the course of inter-State trade or commerce.]
1
[270. Taxes levied and distributed between the Union and the
States.—
(1) All taxes and duties referred to in the Union List, except the duties
and taxes referred to in 2[articles 268, 269 and 269A], respectively, surcharge
on taxes and duties referred to in article 271 and any cess levied for specific
purposes under any law made by Parliament shall be levied and collected by
the Government of India and shall be distributed between the Union and the
States in the manner provided in clause
(2).
3
[(1A) The tax collected by the Union under clause
(1) of article 246A
shall also be distributed between the Union and the States in the manner
provided in clause
(2).
(1B) The tax levied and collected by the Union under clause
(2) of
article 246A and article 269A, which has been used for payment of the tax
levied by the Union under clause
(1) of article 246A, and the amount
apportioned to the Union under clause
(1) of article 269A, shall also be
distributed between the Union and the States in the manner provided in clause
(2).]
______________________________________________
1. Subs. by the Constitution (Eightieth Amendment) Act, 2000, s. 3, for art. 270
(w.e.f. 1-4-1996).
2. Subs. by the Constitution (Eighty-eighth Amendment) Act, 2003, s. 3, for “articles 268
and 269” (not enforced) and further subs. by the Constitution (One Hundred and First
Amendment) Act, 2016, s. 10, for “arts. 268, 268A and 269” (w.e.f. 16-9-2016).
3. Ins. by s. 10, ibid. (w.e.f. 16-9-2016).
156 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
(2) Such percentage, as may be prescribed, of the net proceeds of any
such tax or duty in any financial year shall not form part of the Consolidated
Fund of India, but shall be assigned to the States within which that tax or duty
is leviable in that year, and shall be distributed among those States in such
manner and from such time as may be prescribed in the manner provided in
clause
(3).
(3) In this article, "prescribed" means, —
(i) until a Finance Commission has been constituted, prescribed by
the President by order, and
(ii) after a Finance Commission has been constituted, prescribed by
the President by order after considering the recommendations of the
Finance Commission.]
271. Surcharge on certain duties and taxes for purposes of the
Union.—Notwithstanding anything in articles 269 and 270, Parliament may at
any time increase any of the duties or taxes referred to in those articles 1[except
the goods and services tax under article 246A,] by a surcharge for purposes of
the Union and the whole proceeds of any such surcharge shall form part of the
Consolidated Fund of India.
[272. Taxes which are levied and collected by the Union and may be
distributed between the Union and the States.].—Omitted by the Constitution
(Eightieth Amendment) Act, 2000, s. 4. (w.e.f. 9-6-2000).
273. Grants in lieu of export duty on jute and jute products.—
(1)
There shall be charged on the Consolidated Fund of India in each year as
grants-in-aid of the revenues of the States of Assam, Bihar, 2[Odisha] and West
Bengal, in lieu of assignment of any share of the net proceeds in each year of
export duty on jute and jute products to those States, such sums as may be
prescribed.
(2) The sums so prescribed shall continue to be charged on the
Consolidated Fund of India so long as any export duty on jute or jute products
continues to be levied by the Government of India or until the expiration of ten
years from the commencement of this Constitution whichever is earlier.
______________________________________________
1. Ins. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 11
(w.e.f. 16-9-2016).
2. Subs. by the Orissa (Alteration of Name) Act, 2011 (15 of 2011), s. 5, for "Orissa"
(w.e.f. 1-11-2011).
157 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
(3) In this article, the expression “prescribed” has the same meaning as
in article 270.
274. Prior recommendation of President required to Bills affecting
taxation in which States are interested.—
(1) No Bill or amendment which
imposes or varies any tax or duty in which States are interested, or which varies
the meaning of the expression “agricultural income” as defined for the purposes
of the enactments relating to Indian income-tax, or which affects the principles
on which under any of the foregoing provisions of this Chapter moneys are or
may be distributable to States, or which imposes any such surcharge for the
purposes of the Union as is mentioned in the foregoing provisions of this
Chapter, shall be introduced or moved in either House of Parliament except on
the recommendation of the President.
(2) In this article, the expression “tax or duty in which States are
interested” means—
(a) a tax or duty the whole or part of the net proceeds whereof are
assigned to any State; or
(b) a tax or duty by reference to the net proceeds whereof sums
are for the time being payable out of the Consolidated Fund of India to
any State.
275. Grants from the Union to certain States.—
(1) Such sums as
Parliament may by law provide shall be charged on the Consolidated Fund of
India in each year as grants-in-aid of the revenues of such States as Parliament
may determine to be in need of assistance, and different sums may be fixed for
different States:
Provided that there shall be paid out of the Consolidated Fund of India as
grants-in-aid of the revenues of a State such capital and recurring sums as may
be necessary to enable that State to meet the costs of such schemes of
development as may be undertaken by the State with the approval of the
Government of India for the purpose of promoting the welfare of the Scheduled
Tribes in that State or raising the level of administration of the Scheduled Areas
therein to that of the administration of the rest of the areas of that State:
Provided further that there shall be paid out of the Consolidated Fund of
India as grants-in-aid of the revenues of the State of Assam sums, capital and
recurring, equivalent to—
158 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
(a) the average excess of expenditure over the revenues during the
two years immediately preceding the commencement of this Constitution
in respect of the administration of the tribal areas specified in 1[Part I] of
the table appended to paragraph 20 of the Sixth Schedule; and
(b) the costs of such schemes of development as may be
undertaken by that State with the approval of the Government of India
for the purpose of raising the level of administration of the said areas to
that of the administration of the rest of the areas of that State.
2
[(1A) On and from the formation of the autonomous State under article
244A,—
(i) any sums payable under clause
(a) of the second proviso to
clause
(1) shall, if the autonomous State comprises all the tribal areas
referred to therein, be paid to the autonomous State, and, if the
autonomous State comprises only some of those tribal areas, be
apportioned between the State of Assam and the autonomous State as the
President may, by order, specify;
(ii) there shall be paid out of the Consolidated Fund of India as
grants-in-aid of the revenues of the autonomous State sums, capital and
recurring, equivalent to the costs of such schemes of development as
may be undertaken by the autonomous State with the approval of the
Government of India for the purpose of raising the level of
administration of that State to that of the administration of the rest of the
State of Assam.]
(2) Until provision is made by Parliament under clause
(1), the powers
conferred on Parliament under that clause shall be exercisable by the President
by order and any order made by the President under this clause shall have effect
subject to any provision so made by Parliament:
Provided that after a Finance Commission has been constituted no order
shall be made under this clause by the President except after considering the
recommendations of the Finance Commission.
276. Taxes on professions, trades, callings and employments.—
(1)
Notwithstanding anything in article 246, no law of the Legislature of a State relating
to taxes for the benefit of the State or of a municipality, district board, local board or
other local authority therein in respect of professions, trades, callings or
employments shall be invalid on the ground that it relates to a tax on income.
______________________________________________
1. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971) s. 71,
for "Part A" (w.e.f. 21-1-1972).
2. Ins. by the Constitution (Twenty-second Amendment) Act, 1969, s. 3 (w.e.f. 25-9-1969).
159 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
(2) The total amount payable in respect of any one person to the State or
to any one municipality, district board, local board or other local authority in
the State by way of taxes on professions, trades, callings and employments
shall not exceed 1[two thousand and five hundred rupees] per annum.
2
* * * *
(3) The power of the Legislature of a State to make laws as aforesaid
with respect to taxes on professions, trades, callings and employments shall not
be construed as limiting in any way the power of Parliament to make laws with
respect to taxes on income accruing from or arising out of professions, trades,
callings and employments.
277. Savings.—Any taxes, duties, cesses or fees which, immediately
before the commencement of this Constitution, were being lawfully levied by
the Government of any State or by any municipality or other local authority or
body for the purposes of the State, municipality, district or other local area
may, notwithstanding that those taxes, duties, cesses or fees are mentioned in
the Union List, continue to be levied and to be applied to the same purposes
until provision to the contrary is made by Parliament by law.
278. [Agreement with States in Part B of the First Schedule with regard
to certain financial matters.].—Omitted by the Constitution (Seventh
Amendment) Act, 1956, s. 29 and Sch.(w.e.f. 1-11-1956).
279. Calculation of “net proceeds”, etc.—
(1) In the foregoing
provisions of this Chapter, “net proceeds” means in relation to any tax or duty
the proceeds thereof reduced by the cost of collection, and for the purposes of
those provisions the net proceeds of any tax or duty, or of any part of any tax or
duty, in or attributable to any area shall be ascertained and certified by the
Comptroller and Auditor-General of India, whose certificate shall be final.
(2) Subject as aforesaid, and to any other express provision of this
Chapter, a law made by Parliament or an order of the President may, in any
case where under this Part the proceeds of any duty or tax are, or may be,
assigned to any State, provide for the manner in which the proceeds are to be
calculated, for the time from or at which and the manner in which any
payments are to be made, for the making of adjustments between one financial
year and another, and for any other incidental or ancillary matters.
______________________________________________
1. Subs. by the Constitution (Sixtieth Amendment) Act, 1988, s. 2, for "two hundred and
fifty rupees" (w.e.f. 20-12-1988).
2. Proviso omitted by s.2, ibid. (w.e.f. 20-12-1988).
160 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
1
[279A. Goods and Services Tax Council.—
(1) The President shall,
within sixty days from the date of commencement of the Constitution (One
Hundred and First Amendment) Act, 2016, by order, constitute a Council to be
called the Goods and Services Tax Council.
(2) The Goods and Services Tax Council shall consist of the following
members, namely:—
(a) the Union Finance Minister — Chairperson;
(b) the Union Minister of State in charge of Revenue or
Finance — Member;
(c) the Minister in charge of Finance or Taxation or any other
Minister nominated by each State Government — Members.
(3) The Members of the Goods and Services Tax Council referred to in
sub-clause
(c) of clause
(2) shall, as soon as may be, choose one amongst
themselves to be the Vice-Chairperson of the Council for such period as they
may decide.
(4) The Goods and Services Tax Council shall make recommendations to
the Union and the States on—
(a) the taxes, cesses and surcharges levied by the Union, the
States and the local bodies which may be subsumed in the goods and
services tax;
(b) the goods and services that may be subjected to, or exempted
from, the goods and services tax;
(c) model Goods and Services Tax Laws, principles of levy,
apportionment of Goods and Services Tax levied on supplies in the
course of inter-State trade or commerce under article 269A and the
principles that govern the place of supply;
(d) the threshold limit of turnover below which goods and services
may be exempted from goods and services tax;
(e) the rates including floor rates with bands of goods and services
tax;
(f) any special rate or rates for a specified period, to raise
additional resources during any natural calamity or disaster;
______________________________________________
1. Ins. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 12
(w.e.f. 12-9-2016).
161 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
(g) special provision with respect to the States of Arunachal
Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram,
Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
(h) any other matter relating to the goods and services tax, as the
Council may decide.
(5) The Goods and Services Tax Council shall recommend the date on
which the goods and services tax be levied on petroleum crude, high speed
diesel, motor spirit (commonly known as petrol), natural gas and aviation
turbine fuel.
(6) While discharging the functions conferred by this article, the Goods
and Services Tax Council shall be guided by the need for a harmonised
structure of goods and services tax and for the development of a harmonised
national market for goods and services.
(7) One-half of the total number of Members of the Goods and Services
Tax Council shall constitute the quorum at its meetings.
(8) The Goods and Services Tax Council shall determine the procedure
in the performance of its functions.
(9) Every decision of the Goods and Services Tax Council shall be taken
at a meeting, by a majority of not less than three-fourths of the weighted votes
of the members present and voting, in accordance with the following principles,
namely:—
(a) the vote of the Central Government shall have a weightage of
one-third of the total votes cast; and
(b) the votes of all the State Governments taken together shall
have a weightage of two-thirds of the total votes cast,
in that meeting.
(10) No act or proceedings of the Goods and Services Tax Council shall
be invalid merely by reason of—
(a) any vacancy in, or any defect in, the constitution of the
Council; or
(b) any defect in the appointment of a person as a Member of the
Council; or
(c) any procedural irregularity of the Council not affecting the
merits of the case.
(11) The Goods and Services Tax Council shall establish a mechanism to
adjudicate any dispute—
162 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
(a) between the Government of India and one or more States; or
(b) between the Government of India and any State or States on
one side and one or more other States on the other side; or
(c) between two or more States,
arising out of the recommendations of the Council or implementation thereof.]
280. Finance Commission.—
(1) The President shall, within two years
from the commencement of this Constitution and thereafter at the expiration of
every fifth year or at such earlier time as the President considers necessary, by
order constitute a Finance Commission which shall consist of a Chairman and
four other members to be appointed by the President.
(2) Parliament may by law determine the qualifications which shall be
requisite for appointment as members of the Commission and the manner in
which they shall be selected.
(3) It shall be the duty of the Commission to make recommendations to
the President as to—
(a) the distribution between the Union and the States of the net
proceeds of taxes which are to be, or may be, divided between them
under this Chapter and the allocation between the States of the respective
shares of such proceeds;
(b) the principles which should govern the grants-in-aid of the
revenues of the States out of the Consolidated Fund of India;
1
[(bb) the measures needed to augment the Consolidated Fund of a
State to supplement the resources of the Panchayats in the State on the basis
of the recommendations made by the Finance Commission of the State;]
2
[
(c) the measures needed to augment the Consolidated Fund of a
State to supplement the resources of the Municipalities in the State on
the basis of the recommendations made by the Finance Commission of
the State;]
3
[
(d)] any other matter referred to the Commission by the
President in the interests of sound finance.
(4) The Commission shall determine their procedure and shall have such
powers in the performance of their functions as Parliament may by law confer
on them.
______________________________________________
1. Ins. by the Constitution (Seventy-third Amendment) Act, 1992, s. 3 (w.e.f. 24-4-1993).
2. Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, s. 3 (w.e.f. 1-6-1993).
3. Sub-clause
(c) re-lettered as sub-clause
(d) by s. 3, ibid. (w.e.f. 1-6-1993).
163 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
281. Recommendations of the Finance Commission.—The President
shall cause every recommendation made by the Finance Commission under the
provisions of this Constitution together with an explanatory memorandum as to
the action taken thereon to be laid before each House of Parliament.
Miscellaneous Financial Provisions
282. Expenditure defrayable by the Union or a State out of its
revenues.—The Union or a State may make any grants for any public purpose,
notwithstanding that the purpose is not one with respect to which Parliament or
the Legislature of the State, as the case may be, may make laws.
283. Custody, etc., of Consolidated Funds, Contingency Funds and
moneys credited to the public accounts.—
(1) The custody of the
Consolidated Fund of India and the Contingency Fund of India, the payment of
moneys into such Funds, the withdrawal of moneys therefrom, the custody of
public moneys other than those credited to such Funds received by or on behalf
of the Government of India, their payment into the public account of India and
the withdrawal of moneys from such account and all other matters connected
with or ancillary to matters aforesaid shall be regulated by law made by
Parliament, and, until provision in that behalf is so made, shall be regulated by
rules made by the President.
(2) The custody of the Consolidated Fund of a State and the
Contingency Fund of a State, the payment of moneys into such Funds, the
withdrawal of moneys therefrom, the custody of public moneys other than
those credited to such Funds received by or on behalf of the Government of the
State, their payment into the public account of the State and the withdrawal of
moneys from such account and all other matters connected with or ancillary to
matters aforesaid shall be regulated by law made by the Legislature of the
State, and, until provision in that behalf is so made, shall be regulated by rules
made by the Governor 1*** of the State.
284. Custody of suitors' deposits and other moneys received by
public servants and courts.—All moneys received by or deposited with—
(a) any officer employed in connection with the affairs of the
Union or of a State in his capacity as such, other than revenues or
public moneys raised or received by the Government of India or the
Government of the State, as the case may be; or
(b) any court within the territory of India to the credit of any
cause, matter, account or persons,
______________________________________________
1. The words "or Rajpramukh" omitted by the Constitution (Seventh Amendment)
Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
164 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
shall be paid into the public account of India or the public account of State, as
the case may be.
285. Exemption of property of the Union from State taxation.—
(1)
The property of the Union shall, save in so far as Parliament may by law
otherwise provide, be exempt from all taxes imposed by a State or by any
authority within a State.
(2) Nothing in clause
(1) shall, until Parliament by law otherwise
provides, prevent any authority within a State from levying any tax on any
property of the Union to which such property was immediately before the
commencement of this Constitution liable or treated as liable, so long as that
tax continues to be levied in that State.
286. Restrictions as to imposition of tax on the sale or purchase of
goods.—
(1) No law of a State shall impose, or authorise the imposition of, a
tax on 1[the supply of goods or of services or both, where such supply takes
place]—
(a) outside the State; or
(b) in the course of the import of the 2[goods or services or both]
into, or export of the 2[goods or services or both] out of, the territory of
India.
3
[* * * *]
4
[
(2) Parliament may by law formulate principles for determining when a
5
[supply of goods or of services or both] in any of the ways mentioned in
clause
(1).
6
[
(3) * * * *]
287. Exemption from taxes on electricity.—Save in so far as
Parliament may by law otherwise provide, no law of a State shall impose, or
authorise the imposition of, a tax on the consumption or sale of electricity
______________________________________________
1. Subs. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 13,
(i)(A)
for "the sale or purchase of goods where such sale or purchase takes place"
(w.e.f. 16-9-2016).
2. Subs. by s. 13
(i)(B), ibid., for "goods" (w.e.f. 16-9-2016).
3. Explanation to cl.
(1) omitted by the Constitution (Sixth Amendment) Act, 1956, s. 4
(w.e.f. 11-9-1956).
4. Subs. by s.4, ibid., for cls.
(2) and
(3) (w.e.f. 11-9-1956).
5. Subs. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 13(ii),
for "sale or purchase of goods takes place" (w.e.f. 16-9-2016).
6. Cl.
(3) omitted by s. 13 (iii), ibid. (w.e.f. 16-9-2016).
165 THE CONSTITUTION OF INDIA
(Part XII.—Finance, Property, Contracts and Suits)
(whether produced by a Government or other persons) which is—
(a) consumed by the Government of India, or sold to the
Government of India for consumption by that Government; or
(b) consumed in the construction, maintenance or operation of any
railway by the Government of India or a railway company operating that
railway, or sold to that Government or any such railway company for
consumption in the construction, maintenance or operation of any
railway,
and any such law imposing, or authorising the imposition of, a tax on the sale
of electricity shall secure that the price
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