DIVISION OF FINANCIAL RESOURCES BETWEEN CENTRE AND THE STATE
India follows a federal shape in which the powers are shared among each centre and the states. It's also stated that India follows a quasi-federal shape in which the central government enjoys greater powers over the states.
- Article 268 deals with stamp duty levied by the Union but collected and distributed by the States.
- These taxes are not included in the Consolidation Fund of India and are allocated by the same state in which they are levied, so they do not contribute to the Indian Consolidation Fund.
- With the 88th amendment to the Constitution, a new provision 268 A was included in this article, which included the tax on services in its ambit, but it was again excluded by the 101st Amendment to the Constitution and the introduction of GST.
- It is a tax levied on all inter-state purchases, sales and transportation of goods, except those mentioned in section 269 A and in newspapers.
- Taxes are collected and collected by the central government.
- Taxes are collected and levied by the Center, but are allocated between the Center and the states ( Article 270 ).
- This category includes all taxes and levies mentioned in the List of the Union, with the exception of the following :
- Duties and taxes are referred to in Article 268, 269 and 269 A.
- Surcharges on taxes and duties referred to in Article 271.
- Any levies received for specific purposes.
- Parliament has the right to increase taxes or duties at any time by introducing additional charges, except
- in the case of the goods and services tax referred to in section 246A.
- All income generated from surcharges will be part of India's consolidated fund.
FINANCE COMMISSION - ARTICLE 280
- The Finance Committee, established in 1951 in accordance with article 280 of the Constitution.
- It mainly determines how income is distributed between the Center and the States.
- In addition, the Commission also determines the principles for grants-in-aids to states.
- Article 280 regulates the Finance Commission, a quasi-judicial body established by the President.
The subject topics specified in the three lists, various sorts of government funding in India, GST and its ramifications, the role of the finance commission and GST Council, and the borrowing capacity of the States were all taken into consideration.