What is Article 270?
By BYJU'S Exam Prep
Updated on: November 9th, 2023
Article 270 in the Constitution of India is subjected to the Taxes imposed and collected by the Union and divided between the Union, and the States. It enables the exclusion of cess from the Union government’s obligation to separate a portion of the divisible tax pool with the States.
All taxes and duties included in the Union List are now covered by Article 270, except stamp duties, tax on the sale or purchase of goods and services, surcharges on some taxes, and cess collected for particular reasons.
Table of content
Article 270 in the Constitution of India
On 5 August 1949, draft Article 251 (Article 270, Constitution of India 1950) was discussed. It established the method of collecting and distributing income taxes between the Union and the states. According to this Draft Article, income taxes excluding agricultural income would be collected by the Union government and distributed between the Union and the States in accordance with this provision.
(1) The Government of India shall levy and collect all taxes and duties referred to in the Union List, with the exception of the duties and taxes referred to in Articles 268 and 269, respectively, the surcharge on taxes and duties referred to in Article 271, and any cess imposed for specific purposes under any law made by the Parliament.
(2) The net proceeds of any such tax or duty in any financial year, in the amount prescribed, shall be assigned to the States within which such tax or duty is leviable in that year and shall be distributed among those States in the manner and from the time prescribed by clause, and shall not be a part of the Consolidated Fund of India.
(3) In this article, “prescribed” refers to the following:
- (i) until a Finance Commission has been established, prescribed by the President by order; and
- (ii) following the establishment of a Finance Commission, prescribed by the President by order after taking the Finance Commission’s recommendations into consideration.
Summary:
What is Article 270?
Article 270 of the Constitution deals with levied taxes collected by the Union and distributed between the Union and the States. In simple words, it discusses the established method of collecting and distributing income tax between the states and the union of the country. It makes it possible to exempt cess from the Union government’s requirement to share a portion of the dividing tax pool with the States.
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