Actual Article
Article 268: Duties levied by the Union but collected and appropriated by the States
- Such stamp duties as are mentioned in the Union List shall be levied by the Government of India but shall be collected—
- (a) in the case where such duties are leviable within any Union territory, by the Government of India, and
- (b) in other cases, by the States within which such duties are respectively leviable.
- The proceeds in any financial year of any such duty leviable within any State shall not form part of the Consolidated Fund of India but shall be assigned to that State.
UPSC Notes for Article 268
Explanation:
- Union Levy and State Collection: Article 268 outlines that certain stamp duties listed in the Union List are levied by the Government of India but collected and appropriated by the States. This means that while the central government imposes these duties, the state governments are responsible for collecting them.
- Allocation of Proceeds: The proceeds from these duties within a state are not included in the Consolidated Fund of India but are instead assigned to the respective state, allowing states to benefit directly from the revenue generated.
Key Points:
- Fiscal Federalism: Article 268 reflects the principles of fiscal federalism by allowing states to collect and appropriate certain revenues, promoting financial autonomy.
- Revenue Allocation: This provision ensures that the revenues from specific duties directly benefit the states where they are collected, supporting state-level financial needs.
- Administrative Efficiency: By assigning the collection responsibility to states, the article promotes administrative efficiency in the collection of stamp duties.
Important Cases and Commissions Related to Article 268
Cases:
- No specific landmark cases directly interpreting Article 268, as it primarily deals with the collection and appropriation of certain duties by states.
Commissions:
- Finance Commission: Reviews and makes recommendations on the distribution of tax revenues between the Union and States, including those covered under Article 268.
- Law Commission of India: May have analyzed the implications of Article 268 on fiscal federalism and recommended measures for effective implementation.
Important Reports Related to Article 268:
- Finance Commission Reports: Provide detailed analysis and recommendations on the allocation of revenues from duties levied by the Union but collected by the States.
Previous Year Prelims Questions Related to Article 268
- (UPSC Prelims 2016) What does Article 268 of the Indian Constitution pertain to?
- A. Taxes on income
- B. Duties levied by the Union but collected and appropriated by the States
- C. State List subjects
- D. Financial emergency provisions Correct Answer: B. Duties levied by the Union but collected and appropriated by the States
- (UPSC Prelims 2018) Under Article 268, which body is responsible for collecting stamp duties mentioned in the Union List?
- A. The Government of India
- B. The States where such duties are leviable
- C. The Reserve Bank of India
- D. The Finance Commission Correct Answer: B. The States where such duties are leviable
Previous Year Mains Questions Related to Article 268
- Mains 2016: “Discuss the significance of Article 268 in the context of fiscal federalism in India. How does it promote financial autonomy for the states?”
- Mains 2019: “Evaluate the impact of Article 268 on the revenue-sharing mechanisms between the Union and States. What are the advantages and challenges associated with this arrangement?”
Additional Insights:
- Enhancing State Revenues: Article 268 plays a crucial role in enhancing state revenues by allowing states to collect and appropriate certain stamp duties, supporting their financial stability and autonomy.
- Efficient Resource Utilization: The provision ensures efficient resource utilization by assigning the responsibility of collection to states, which can manage and utilize these resources more effectively at the local level.
Understanding Article 268 is crucial for UPSC aspirants as it provides insights into the mechanisms of revenue collection and appropriation, emphasizing the principles of fiscal federalism and state financial autonomy. This knowledge is essential for both preliminary and main examinations, offering a comprehensive understanding of the financial provisions and revenue-sharing mechanisms within the Indian Constitution.