Actual Article
Article 277: Savings
Any taxes, duties, cesses, or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district, or other local area may, notwithstanding that those taxes, duties, cesses, or fees are mentioned in the Union List, continue to be levied and to be applied for the same purposes until provision to the contrary is made by Parliament by law.
UPSC Notes for Article 277
Explanation:
- Continuation of Pre-Constitution Levies: Article 277 allows for the continuation of taxes, duties, cesses, or fees that were lawfully levied by any State government or local authority immediately before the commencement of the Constitution.
- Union List Items: This article ensures that even if these levies are mentioned in the Union List, they can still be collected by the States or local authorities until Parliament decides otherwise.
- Purpose of the Levies: The taxes, duties, cesses, or fees must be applied for the same purposes as they were before the Constitution came into force, ensuring continuity in their use.
Key Points:
- Transitional Provision: Article 277 serves as a transitional provision, allowing the continuation of existing financial practices until new legislation is enacted.
- Autonomy for Local Bodies: It provides a measure of financial autonomy to States and local bodies by allowing them to continue levying and applying pre-existing taxes and fees.
- Legislative Override: Parliament retains the power to change or abolish these levies through new legislation, maintaining the balance between local autonomy and central authority.
Important Cases and Commissions Related to Article 277
Cases:
- State of West Bengal vs. Kesoram Industries Ltd. (2004): The Supreme Court interpreted various aspects of fiscal federalism, including the scope of Article 277 in the context of tax levies.
Commissions:
- Finance Commission: Reviews and recommends measures for the distribution of financial resources, considering existing levies and their continuity under Article 277.
- State Finance Commissions: Examine the financial needs of local bodies, including the continuation of pre-existing levies under Article 277.
Important Reports Related to Article 277:
- Finance Commission Reports: Analyze the impact of continuing pre-existing taxes and fees on State and local finances and recommend measures for effective financial management.
- State Finance Commission Reports: Discuss the role of pre-existing levies in local governance and recommend strategies for enhancing revenue generation.
Previous Year Prelims Questions Related to Article 277
- (UPSC Prelims 2016) What does Article 277 of the Indian Constitution pertain to?
- A. Introduction of new taxes
- B. Continuation of pre-Constitution taxes, duties, cesses, or fees
- C. Distribution of revenues between the Union and States
- D. Financial emergency provisions Correct Answer: B. Continuation of pre-Constitution taxes, duties, cesses, or fees
- (UPSC Prelims 2018) Under Article 277, who has the authority to discontinue the pre-existing taxes, duties, cesses, or fees?
- A. The President
- B. The Prime Minister
- C. The Parliament
- D. The Finance Minister Correct Answer: C. The Parliament
Previous Year Mains Questions Related to Article 277
- Mains 2016: “Discuss the significance of Article 277 in ensuring financial continuity for States and local bodies. How does this article balance local autonomy with the central legislative authority?”
- Mains 2019: “Evaluate the impact of Article 277 on fiscal federalism in India. What are the advantages and challenges associated with the continuation of pre-existing levies?”
Additional Insights:
- Ensuring Continuity: Article 277 ensures financial continuity for States and local bodies, allowing them to maintain existing revenue streams until new legislation is enacted.
- Financial Autonomy: By allowing the continuation of pre-existing levies, the article supports the financial autonomy of States and local authorities, helping them manage their financial needs effectively.
Understanding Article 277 is crucial for UPSC aspirants as it provides insights into the mechanisms for continuing pre-existing taxes and fees, emphasizing the importance of financial continuity and autonomy for local and State governments. This knowledge is essential for both preliminary and main examinations, offering a comprehensive understanding of the financial provisions and transitional mechanisms within the Indian Constitution.