Actual Article
Article 279: Calculation of “net proceeds”
- In the foregoing provisions of this Chapter, the expression “net proceeds” means in relation to any tax or duty the proceeds thereof reduced by the cost of collection, as ascertained and certified by the Comptroller and Auditor-General of India.
- Subject to the provisions of any law made by Parliament, any sum certified by the Comptroller and Auditor-General of India under this article shall be final, and not be questioned in any court.
UPSC Notes for Article 279
Explanation:
- Definition of Net Proceeds: Clause (1) defines “net proceeds” as the total revenue from any tax or duty minus the cost of collection. This is ascertained and certified by the Comptroller and Auditor-General (CAG) of India.
- Finality of Certification: Clause (2) states that the certification by the CAG is final and cannot be questioned in any court, subject to any law made by Parliament.
Key Points:
- Role of CAG: The Comptroller and Auditor-General of India plays a crucial role in determining and certifying the net proceeds from taxes and duties, ensuring accuracy and transparency.
- Final Authority: The certification by the CAG is considered final, providing certainty and avoiding legal disputes over the calculation of net proceeds.
- Cost of Collection: The article highlights the importance of accounting for the cost of collection when determining the net revenue from taxes and duties.
Important Cases and Commissions Related to Article 279
Cases:
- No specific landmark cases directly interpreting Article 279, as it primarily deals with the procedural aspect of calculating net proceeds.
Commissions:
- Finance Commission: Reviews and makes recommendations on the distribution of net proceeds of taxes between the Union and the States, considering the certifications provided by the CAG.
- N.K. Singh Commission (Fifteenth Finance Commission): Considers the certified net proceeds in its recommendations for fiscal allocations.
Important Reports Related to Article 279:
- Finance Commission Reports: Provide detailed analysis and recommendations on the distribution of net proceeds of taxes and duties, ensuring transparency and accuracy in revenue sharing.
- CAG Reports: Include certifications of net proceeds, ensuring that the financial data used for revenue sharing is accurate and reliable.
Previous Year Prelims Questions Related to Article 279
- (UPSC Prelims 2016) What does the expression “net proceeds” mean in the context of Article 279 of the Indian Constitution?
- A. Total tax revenue collected
- B. Revenue after deducting the cost of collection
- C. Gross domestic product
- D. Net national income Correct Answer: B. Revenue after deducting the cost of collection
- (UPSC Prelims 2018) Who certifies the net proceeds of any tax or duty according to Article 279?
- A. The Finance Minister
- B. The Comptroller and Auditor-General of India
- C. The Prime Minister
- D. The President Correct Answer: B. The Comptroller and Auditor-General of India
Previous Year Mains Questions Related to Article 279
- Mains 2016: “Discuss the significance of Article 279 in ensuring transparency and accuracy in the calculation of net proceeds of taxes and duties. How does the role of the Comptroller and Auditor-General of India contribute to this process?”
- Mains 2019: “Evaluate the impact of the certification of net proceeds by the Comptroller and Auditor-General of India on fiscal federalism. How does this certification ensure equitable distribution of tax revenues?”
Additional Insights:
- Ensuring Accurate Revenue Sharing: Article 279 ensures that the net proceeds of taxes and duties are accurately calculated and certified, facilitating fair revenue sharing between the Union and the States.
- Transparency and Accountability: The involvement of the Comptroller and Auditor-General of India in certifying net proceeds promotes transparency and accountability in fiscal matters, building trust in the financial data used for revenue distribution.
Understanding Article 279 is crucial for UPSC aspirants as it provides insights into the procedural mechanisms for calculating and certifying net proceeds of taxes and duties, emphasizing the importance of transparency and accuracy in fiscal federalism. 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.