2.3. Financial Relations (Art.268 to Art.293)

The Indian Constitution has elaborate provisions regarding the distribution of revenues between the Union and the States. Article 268 to 293 in Part XII deal with the financial relations. The financial relations between the Union and the States can be studied under the following heads:

1. Taxes and duties levied by the Union, but collected and appropriated by the States: Stamp duties are levied by the Government of India, but collected and appropriated by the States, within which such duties are leviable, except in the Union Territories, where they are collected by the Union Government(Art. 268).The proceeds of these duties levied within any State are assigned to that State only and do not form a part of Consolidated Fund of India.

2. Service tax levied by the Centre, but collected and appropriated by the Centre and the States (Article 268A): This has been omitted after adoption of GST through 101st constitutional amendment act.