Article 279 of Indian Constitution: Calculation of Net proceeds etc.

Article 279 of Indian Constitution articulates what "net proceeds" are. The "net proceeds" mean the revenue collected from a tax or duty after taking the cost of collection off. It is the responsibility of the Comptroller and Auditor-General of India to determine these net proceeds, as well as to confirm them. This official confirmation preserves both the veracity of a tax system and transparency in its operation (for lack of another term) since he has the final say on how much each taxpayer should receive or pay in taxes and duties net proceeds government bond calculations involving such sums as might be received from taxation or paid out through levies. Explore other important Constitutional Articles

Article 279 of Indian Constitution

Calculation of "net proceeds", etc.

1. In the foregoing provisions of this Chapter, "net proceeds" means in relation to any tax or duty the proceeds thereof reduced by the cost of collection, and for the purposes of those provisions the net proceeds of any tax or duty, or of any part of any tax or duty, in or attributable to any area shall be ascertained and certified by the Comptroller and Auditor-General of India, whose certificate shall be final.
2. Subject as aforesaid, and to any other express provision of this Chapter, a law made by Parliament or an order of the President may, in any case where under this Part the proceeds of any duly or tax are, or may be, assigned to any State, provide for the manner in which the proceeds are to be calculated, for the lime from or at which and the manner in which any payments are to be made, for the making of adjustment between one financial year and another, and for any other incidental or ancillary matters.

Note: "The information on Article 279 of Indian Constitution is referred from the official website of the Indian Code and is for reference only. Original laws and orders remain untouched.

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Article 279 of Indian Constitution defines "net proceeds" from taxes, certified by the Comptroller and Auditor-General, ensuring transparency, finality, and equitable revenue sharing between Union and States and further interpreted in points:

1. Net Proceeds Defined: Article 279 of Constitution of India refers to the total revenue from a tax or duty, reduced by the cost of collection.
2. Role of the Comptroller and Auditor-General (CAG): The CAG certifies the net proceeds, and this certification is final and binding.
3. Parliamentary Oversight: Parliament can legislate on how these proceeds are calculated, distributed, and adjusted between financial years.
4. Fiscal Federalism: It ensures fair revenue sharing between the Union and States, supporting India's federal structure.

Article 279 of Indian Constitution Significance

The importance of Article 279 of Indian Constitution lies in its role in ensuring transparency and fairness in revenue sharing between Union and States is the most significant.

1. Uniform for Revenue Calculation: By defining "net proceeds" and using the Comptroller and Auditor-General (CAG) for certification, it ensures financial matters are correct.
2. Certification's Finality: The CAG's certification is binding, which creates certainty and prevents arguing over revenue calculations.
3. Supports Fiscal Federalism: Article 279 of Indian Constitution is in favour of fiscal federalism. It can rationally allocate tax revenue and make the fiscal union between the Union and states stronger.
4. Parliamentary oversight: The Draft Law provides for the content revised on 2 June 2010, for Parliament to pass laws on revenue-sharing arrangements, establishing a system of accountability and responsibility.
5. Economic stability: By establishing clear parameters for revenue allocation, it contributes to national financial stability.

Article 279 of Indian Constitution Landmark Cases

Article 279 of Indian Constitution plays an important role in defining the financial relationship between the Union and the States especially in the context of revenue distribution and GST implementation. The following landmark cases that highlight the evolving interpretation and practical significance of Article 279:

M/s. Solairepro Urja Private Limited v. Union of India

The case M/s. Solairepro Urja Private Limited v. Union of India is relevant to Article 279 in the context of fiscal federalism and cooperative governance. It outlines the implications of constitutional amendments like the omission of Article 279-B and the inclusion of Article 279(1), by the Constitution Amendment Act, 2016. These alterations led to the affected areas of the recommendations of the GST Council and their obligatory character in terms of Article 279-A(4). The case reflects the changing nature of Article 279 in India’s fiscal and legal framework.

Rawmet Resources (P) Limited v. Union of India

The case Rawmet Resources (P) Limited v. Union of India is also relevant for Article 279 because it underlines the characteristics of fiscal federalism in the era of GST. The Court explained that the avoidance of double taxation and compliance with constitutional mandates parallel the framework provided in Article 279. The case also underlines how Article 279 is developing and emerging as an instrument of transparency and fairness in sharing revenue between the Union and the states.

Conclusion

Article 279 of the Constitution of India is instrumental for averse transparency, equity and accuracy for the determination and sharing of tax collections and revenue incomes between the Union and the States. In defining “net proceeds” and providing for certification by the Comptroller and Auditor-General (CAG), the amendment creates a sound institutional environment for fiscal federalism. By doing so, it maintains the spirit of cooperative federalism, avoids revenue-related disputes and promotes the financial stability of our federal structure by ensuring a sound financial relationship.