Provisions of constitution regarding taxation
The power to levy and collect taxes
emerges from the constitution of India. The following are the significant
provisions of the constitution regarding taxation:
1. Article 265: It states that no tax shall be
levied or collected except by authority of law. In fact, it prohibits arbitrary
collection of tax.
2. Article 246: The authority to enact law and levy
taxes and duties is given by constitution vide Article 246. The Parliament may
make laws for the whole of India or any part of the territory of India, the
State legislature may make laws for whole or part of the State.
3. Seventh Schedule (to Article 246): The Seventh
Schedule contains three lists which enumerate the matters under which the union
and the State Governments have the authority to make laws.
(a) List I (Union List): The Central Government has
the exclusive right to make laws in respect of any matter covered in this list.
Parliament makes law in this regard. Some of the items in List I are defense of
India, naval, military and air forces, atomic energy and mineral resources,
central bureau of intelligence and investigation, railways, highways, currency,
RBI, post office saving bank, taxes on income other than agricultural income, duties
of customs, corporation tax, etc.
(b) List II (State List): It contains the matters in
respect of which the State Government has the exclusive right to make laws.
These matters include public order, police, local government, public health and
sanitation, hospital, burials and burial grounds, cremation ground, libraries,
water, fisheries, betting and gambling, etc.
(c) List III (Concurrent List): It contains the
matters in respect of which both Central & State Governments have powers to
make laws. This list includes criminal laws, criminal procedure, marriage and
divorce, contracts including partnership, agency, bankruptcy and insolvency,
trust and trustees, trade unions, industrial and labour disputes, etc.
Ref:
1. Balachandran V - Indirect Taxes
2. ICAI - Indirect Taxes
3. ICSI - Indirect Taxes
4. ICMAI - Indirect Taxes
5. LPU - Indirect Taxes
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