Articles 265 to 289 – Scope of Tax Laws

Articles 265 to 289 of the Constitution of India fall under Part XII: Finance, Property, Contracts and Suits. These articles define the framework within which taxation laws operate in India, laying down the powers, responsibilities, and procedures for tax levy and distribution between the Union and States.

Important Articles: 265 to 289

1. Article 265: “No tax shall be levied or collected except by authority of law.” This upholds the principle of legality in taxation.
2. Article 266: All revenues received by the Government of India or a State go into the Consolidated Fund. No expenditure can be incurred without parliamentary approval.
3. Article 267: Establishes the Contingency Fund of India and States for emergency expenditures.
4. Article 268: Duties levied by the Union but collected and appropriated by the States (e.g., stamp duties on financial documents).
5. Article 269: Taxes levied and collected by the Union but assigned to the States (e.g., inter-state sale of goods before GST).
6. Article 269A: Introduced by the 101st Constitutional Amendment. Governs the levy and collection of Goods and Services Tax (GST) on inter-state trade.
7. Article 270: Taxes levied and collected by the Union and distributed between the Union and States, as per the Finance Commission’s recommendations.
8. Article 271: Parliament may increase duties or taxes for national development purposes.
9. Article 272 (Repealed): Previously dealt with distribution of Union duties; repealed post-GST implementation.
10. Article 273: Grants in aid to States exporting jute and jute products, discontinued post-Finance Commission reforms.
11. Article 274: Requires President’s recommendation before bills imposing or varying taxes are introduced in Parliament.
12. Article 275: Grants from Union to certain States for promoting welfare of Scheduled Tribes and development of backward areas.
13. Article 276: Empowers States and local bodies to levy profession tax, subject to a maximum limit (₹2500 per annum).
14. Article 277: Continues any taxes already lawfully being levied before the commencement of the Constitution, unless repealed or modified.
15. Article 278: Deals with agreements between the Union and States regarding financial matters. Mostly redundant after Article 279A.
16. Article 279: Defines "net proceeds" of taxes and authorizes the Comptroller and Auditor-General to certify them.
17. Article 279A: Constitutes the GST Council, which makes recommendations on key GST matters, including tax rates, exemptions, and model laws.
18. Article 280: Establishes the Finance Commission to recommend distribution of tax revenues between the Centre and States.
19. Article 281: Provides for placing Finance Commission recommendations before Parliament.
20. Article 282: Allows the Union or a State to make grants for any public purpose, even outside its legislative competence.
21. Article 283: Deals with custody and management of Consolidated, Contingency and Public Accounts funds of Union and States.
22. Article 284: Relates to custody of revenues received by public servants and judges.
23. Article 285: Exempts Union property from State taxation, unless Parliament provides otherwise.
24. Article 286: Restricts States from imposing taxes on inter-State or international trade.
25. Article 287: Exempts electricity consumed by the Union from State taxes unless Parliament otherwise provides.
26. Article 288: Exempts Union property from State taxation in respect of water or electricity, unless Parliament enacts otherwise.
27. Article 289: States are exempt from Union taxation in respect of property and income unless used for commercial purposes.

Conclusion

Articles 265 to 289 form the bedrock of India's tax law framework. They define not just the powers to tax, but also establish principles of fiscal federalism, ensuring a fair distribution of resources between the Centre and States while safeguarding constitutional limits.

Posted by Pavan Law Chambers | June 2025