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 Consider the following statements and identify the right ones.
i. Central government does not have exclusive power to impose tax which is not mentioned in state or concurrent list.
ii. The constitution also provides for transferring certain tax revenues from union list to states.
  • a)
    i only
  • b)
    ii only
  • c)
    both
  • d)
    none
Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements and identify the right ones.i. Centr...
Central government has exclusive power to impose tax which is not mentioned in state or concurrent list.
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Consider the following statements and identify the right ones.i. Centr...
< b="" />Statement i:< />
The statement i is incorrect. According to the Constitution of India, the Central government has the exclusive power to impose taxes that are not mentioned in the State or Concurrent List. The Union List in the Seventh Schedule of the Constitution includes subjects on which only the Central government can make laws, and this includes the power to levy taxes not mentioned in the State or Concurrent List.

< b="" />Statement ii:< />
The statement ii is correct. The Constitution provides for transferring certain tax revenues from the Union List to the states. This is done through the mechanism of devolution of taxes. The Constitution has provisions for the sharing of tax revenues between the Central government and the state governments. These provisions are aimed at ensuring fiscal autonomy and financial stability for the states.

< b="" />Devolution of Taxes:< />
Devolution of taxes refers to the sharing of tax revenues between the Central government and the state governments. As per the provisions of the Constitution, taxes collected by the Central government are shared with the states through various mechanisms. This includes taxes like the Goods and Services Tax (GST), which is levied by the Central government but shared with the states.

< b="" />Article 270 of the Constitution:< />
Article 270 of the Constitution deals with the distribution of taxes between the Union and the states. It provides for the distribution of certain taxes, such as the income tax, corporation tax, and taxes on inter-state trade or commerce, between the Central government and the states. The sharing of these taxes is done based on the recommendations of the Finance Commission.

< b="" />Finance Commission:< />
The Finance Commission is a constitutional body that is responsible for recommending the distribution of taxes between the Centre and the states. It is constituted every five years and submits its report to the President of India. The recommendations of the Finance Commission play a crucial role in determining the devolution of taxes to the states.

< b="" />Conclusion:< />
In conclusion, statement i is incorrect as the Central government does have the exclusive power to impose taxes not mentioned in the State or Concurrent List. However, statement ii is correct as the Constitution provides for the transfer of certain tax revenues from the Union List to the states through the mechanism of devolution of taxes.
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Consider the following statements and identify the right ones.i. Central government does not have exclusive power to impose tax which is not mentioned in state or concurrent list.ii. The constitution also provides for transferring certain tax revenues from union list to states.a)i onlyb)ii onlyc)bothd)noneCorrect answer is option 'B'. Can you explain this answer?
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