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Difficulty: HardFiscal Policy, Union/State Budgeting, Public Finance, and Taxation Structure

In Indian public finance, Part XII of the Constitution governs Centre-State financial relations, assignment of taxation powers, and fiscal transfers. Match the Constitutional Articles in List I with their corresponding financial provisions in List II.

  • Article 268Duties levied by the Union but collected and appropriated by the State Governments
  • Article 269ALevy and collection of Goods and Services Tax in the course of inter-State trade or commerce
  • Article 271Surcharge on certain Union duties and taxes earmarked exclusively for the purposes of the Union
  • Article 275Statutory grants-in-aid charged on the Consolidated Fund of India to specific States in need of financial assistance

Answer

Article 268 corresponds to duties levied by the Union but collected and appropriated by States; Article 269A corresponds to the levy and collection of GST in inter-State trade; Article 271 corresponds to surcharges on Union duties for Union purposes; and Article 275 corresponds to statutory grants-in-aid to States.
The matching correctly pairs each constitutional article with its specific fiscal mechanism under Part XII of the Constitution of India: Article 268 handles Union-levied but State-collected duties; Article 269A regulates inter-State GST; Article 271 governs non-divisible Union surcharges; and Article 275 governs statutory grants-in-aid.

Step-by-Step Solution

1
Identify the constitutional scope of Article 268
Article 268 deals with stamp duties on bills of exchange, cheques, etc., which are levied by the Union but collected and appropriated entirely by the States.
It forms a distinct category of tax assignment under Centre-State financial relations.
2
Identify the provision under Article 269A
Article 269A mandates that GST on supplies in the course of inter-State trade or commerce (IGST) is levied and collected by the Government of India and apportioned between the Union and States.
This provision was specifically introduced via the 101st Constitutional Amendment Act, 2016.
3
Examine the rule regarding surcharges under Article 271
Article 271 allows Parliament to impose a surcharge for Union purposes on taxes listed under Articles 269 and 270, keeping these funds out of the divisible tax pool.
Surcharges do not form part of the tax revenue shared with the States.
4
Verify statutory grant provisions under Article 275
Article 275 specifies non-statutory and statutory grants-in-aid recommended by the Finance Commission and charged on the Consolidated Fund of India.
This mechanisms bridges fiscal deficits of specific recipient States.

Key Concept

Constitutional Provisions of Indian Public Finance and Taxation Distribution
Estimated Time:2m 0s
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Topics

Fiscal Policy, Union/State Budgeting, Public Finance, and Taxation Structure