Actual Article
Article 274: Prior recommendation of President required to Bills affecting taxation in which States are interested
- 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 surcharge on any specified tax or duty for the purposes of the Union, shall be introduced or moved in either House of Parliament except on the recommendation of the President.
- No Bill or amendment which imposes or varies any tax or duty which is to be levied and collected by the Government of India except by way of a surcharge for the purposes of the Union, and which is to be assigned to the States or the net proceeds whereof are to be distributed among the States, shall be introduced or moved in either House of Parliament except after such recommendation has been obtained.
UPSC Notes for Article 274
Explanation:
- Presidential Recommendation: Article 274 mandates that any Bill or amendment affecting taxes or duties in which States are interested must be introduced in Parliament only with the prior recommendation of the President.
- Scope of Bills: This includes Bills that impose or vary taxes or duties in which States are interested, change the definition of “agricultural income” for income tax purposes, affect the distribution principles of revenues to States, or impose surcharges for Union purposes.
Key Points:
- Safeguarding State Interests: The requirement for Presidential recommendation ensures that the interests of States are considered before any tax-related legislation affecting them is introduced.
- Legislative Control: This provision provides a check on Parliament, ensuring that significant tax changes affecting States receive careful consideration and approval from the President.
- Balance of Powers: Article 274 helps maintain a balance of powers between the Union and the States in matters of taxation and revenue distribution.
Important Cases and Commissions Related to Article 274
Cases:
- No specific landmark cases directly interpreting Article 274, as it primarily deals with procedural requirements for tax-related legislation.
Commissions:
- Finance Commission: Reviews and recommends measures regarding the distribution of revenues between the Union and the States, ensuring compliance with the principles laid out in Article 274.
- Law Commission of India: May review procedural aspects related to legislative processes involving taxation and revenue distribution.
Important Reports Related to Article 274:
- Finance Commission Reports: Provide analysis and recommendations on the distribution of tax revenues and the impact of proposed legislative changes on State finances.
- Reports on Tax Reforms: Discuss the procedural requirements for introducing tax-related Bills and the role of Presidential recommendation in safeguarding State interests.
Previous Year Prelims Questions Related to Article 274
- (UPSC Prelims 2016) What is required before introducing a Bill affecting taxes in which States are interested, according to Article 274?
- A. Approval by the Supreme Court
- B. Recommendation of the President
- C. Approval by the Prime Minister
- D. Recommendation of the Finance Minister Correct Answer: B. Recommendation of the President
- (UPSC Prelims 2018) Which of the following Bills require the prior recommendation of the President under Article 274?
- A. Bills affecting the principles of revenue distribution to States
- B. Bills imposing new surcharges for Union purposes
- C. Bills changing the definition of “agricultural income” for income tax purposes
- D. All of the above Correct Answer: D. All of the above
Previous Year Mains Questions Related to Article 274
- Mains 2016: “Discuss the significance of Article 274 in ensuring that the interests of States are protected in matters of taxation. How does the requirement of Presidential recommendation act as a safeguard?”
- Mains 2019: “Evaluate the impact of Article 274 on the legislative process in India. How does it balance the powers between the Union and the States in tax-related matters?”
Additional Insights:
- Protecting State Revenue Interests: Article 274 ensures that changes in taxation that affect State revenues are carefully considered, protecting the financial interests of States.
- Ensuring Due Process: The requirement for Presidential recommendation adds a layer of scrutiny, ensuring that tax-related Bills are thoroughly vetted before being introduced in Parliament.
Understanding Article 274 is crucial for UPSC aspirants as it provides insights into the procedural requirements for introducing tax-related legislation, emphasizing the importance of safeguarding State interests and maintaining a balance of powers. This knowledge is essential for both preliminary and main examinations, offering a comprehensive understanding of the legislative processes and revenue mechanisms within the Indian Constitution.