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Part XII of the Constitution of India (Articles 264–300A) lays down the financial and property framework: taxation authority and distribution, Consolidated and Contingency Funds, GST and the GST Council, the Finance Commission, grants and exemptions, borrowing, succession to government property, contracts and suits involving government, and the constitutional right to property.
Articles 264 to 300A
Interpretation
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Taxes not to be imposed save by authority of law
Consolidated Funds and public accounts of India and of the States
Contingency Fund
Duties levied by the Union but collected and appropriated by the States
Service tax levied by Union and collected and appropriated by the Union and the States
Taxes levied and collected by the Union but assigned to the States
Levy and collection of goods and services tax in course of inter-State trade or commerce
Taxes levied and distributed between the Union and the States
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Surcharge on certain duties and taxes for purposes of the Union
Taxes which are levied and collected by the Union and may be distributed between the Union and the States
Grants in lieu of export duty on jute and jute products
Prior recommendation of President required to Bills affecting taxation in which States are interested
Grants from the Union to certain States
Taxes on professions, trades, callings and employments
Savings
Agreement with States in Part B of the First Schedule with regard to certain financial matters
Calculation of “net proceeds”, etc.
Goods and Services Tax Council
Finance Commission
Recommendations of the Finance Commission
Expenditure defrayable by the Union or a State out of its revenues
Custody, etc., of Consolidated Funds, Contingency Funds and moneys credited to the public accounts.
Custody of suitors' deposits and other moneys received by public servants and courts
Exemption of property of the Union from State taxation
Restrictions as to imposition of tax on the sale or purchase of goods
Exemption from taxes on electricity
Exemption from taxation by States in respect of water or electricity in certain cases
Exemption of property and income of a State from Union taxation
Adjustment in respect of certain expenses and pensions
Annual payment to certain Devaswom Funds
Privy purse sums of Rulers
Borrowing by the Government of Indi
Borrowing by State
Succession to property, assets, rights, liabilities and obligations in certain cases
Succession to property, assets, rights, liabilities and obligations in other cases
Property accruing by escheat or lapse or as bona vacantia
Things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union
Power to carry on trade, etc.
Contracts
Suits and proceedings
Persons not to be deprived of property save by authority of law
Frequently Asked Questions
Which articles govern taxation powers and revenues?
Articles 265–271 and 269–270 address taxation authority, taxes levied and distributed between Union and States, and surcharges; Article 269A and 279A address GST levy/collection and the GST Council.
What are the Consolidated Fund and Contingency Fund?
Article 266 establishes the Consolidated Funds and public accounts of India and the States, and Article 267 provides for the Contingency Fund in the nature of an imprest.
What is the Finance Commission and what does it do?
Article 280 requires the President to constitute a Finance Commission to recommend distribution of net tax proceeds between Union and States and principles for grants-in-aid; Article 281 addresses submission of its recommendations.
How are GST and inter-State trade covered?
Article 269A provides for levy and collection of GST on inter-State trade or commerce, and Article 279A establishes the GST Council for recommendations on GST-related matters.
What exemptions are provided for government property and certain supplies?
Article 285 exempts Union property from State taxation; Article 289 exempts State property and income from Union taxation, and Articles 287–288 provide specified tax exemptions for electricity and certain supplies like water.
What are the provisions on borrowing and public expenditure?
Part XII includes provisions for public expenditure out of Consolidated Funds and public accounts, and contains a separate chapter on borrowing powers and related financial administration.
How does Part XII deal with government property and succession?
Articles 294–297 address succession to property, assets, rights, liabilities and obligations of government, escheat and bona vacantia vesting, and ownership of resources within territorial waters and the exclusive economic zone.