Vol. 13 · pages 251–255

of clause (b) of this article shall not apply to trade or commerce in any of the commodities mentioned in clause (a) of article 306 of this Constitution. Appointment of authority to carry out the provisions of articles 243 and 244. *245. Parliament shall by law appoint such authority as it considers appropriate for the carrying out of the provisions of articles 243 and 244 of this Constitution and confer on the authority so appointed such powers and such duties as it thinks necessary. 5 Co-ordination between States Provisions with respect to an Inter- State Council 246. If at any time it appears to the President that the public interests would be served by the establishment of a Council charged with the duty of— 10 (a) inquiring into and advising upon disputes which may have arisen between States; (b) investigating and discussing subjects in which some or all of the States, or the Union and one or more of the States have a common interest; or 15 (c) making recommendations upon any such sub- ject and, in particular, recommendations for the better co-ordination of policy and action with respect to that subject, 20 it shall be lawful for the President by order to establish such a Council and to define the nature of the duties to be performed by it and its organisation and procedure. 25 *The Committee is of opinion that it would be more appro- priate to provide for the appointment of an authority by law for the purpose of carrying out the provisions of articles 243 and 244 instead of providing for an Inter-State Commission with limited powers as such a Commission, if appointed with powers only to adjudicate disputes as to trade or commerce, may not have suffi- cient work to do. 250 THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 218 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES

PART X Finance, Property, Contracts and Suits CHAPTER I—Finance *DISTRIBUTION OF REVENUES BETWEEN THE UNION AND THE STATES 5 Interpretation 247. In this Part, unless the context otherwise requires,— (a) “Finance Commission” means a Finance Commission constituted under article 260 of this Constitution; 10 (b) “State” does not include a State for the time being specified in Part II of the First Schedule; (c) references to States for the time being speci- fied in Part II of the First Schedule shall include references to any territory specified in Part IV of the First Schedule and any other territory comprised within the territory of India but not specified in that Schedule. 15 20 Meaning of “revenues of India” and “revenues of the State. “ 248. Subject to the following provisions of this Chapter with respect to the assignment of the whole or part of the net proceeds of certain taxes and duties to States, the expression ‘revenues of India’ includes all revenues and public moneys raised or received by the Government of India and the expres- sion ‘revenues of the State’ includes all revenues and public moneys raised or received by the Govern- ment of a State. 25 *The Committee has not embodied in the Draft the re- commendations of the Expert Committee on the Financial Pro- visions of the Constitution with regard to the distribution of revenues between the Union and the States, as the Committee is of opinion that in view of the unstable conditions prevailing at the present moment the existing distribution of such revenues under the Government of India Act. 1935, should continue for at least five years, after which a Finance Commission may review the position. The Committee agrees with the Export Committee that steps should be taken for the collection, compilation and maintenance of statistical information referred to in paragraph 66 of the report of the Export Committee in order that such informa- tion might be available to the Finance Commission when appointed. THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 251 219THE DRAFT CONSTITUTION

Duties levied by the Union but collected and appro- priated by the States. 249, (1) Such stamp duties and such duties of excise on medicinal and toilet preparations as are mentioned in the Union List shall be levied by the Government of India but shall be collected— (a) in the case where such duties are leviable within any State for the time being specified in Part II of the First Schedule, by the Government of India, and 5 (b) in other cases, by the States within which such duties are respectively leviable. 10 (2) The proceeds in any financial year of any such duty leviable in that year within any State shall not form part of the revenues of India, but shall be assigned to that State. Taxes levied and collec- ted by the Union but assigned to the States. 250. (I) The following duties and taxes shall be levied and collected by the Government of India but shall be assigned to the States in the manner provid- ed in clause (2) of this article, namely:— 15 (a) duties in respect of succession to property other than agricultural land; 20 (b) estate duty in respect of property other than agricultural land; (c) terminal taxes on goods or passengers carried by railway or air; (d) taxes on railway fares and freights. 25 (2) The net proceeds in any financial year of any such duty or tax, except in so far as those proceeds represent proceeds attributable to States for the time being specified in Part II of the First Schedule, shall not form part of the revenues of India, but shall be assigned to the States within which that duty or tax is leviable in that year, and shall be distributed among those States in accord- ance with such principles of distribution as may be formulated by Parliament by law. 30 35 Taxed levied and collec- ted by the Union and distributed between the Union and the States. 251. (1) Taxes on income other than agricultural income shall be levied and collected by the Govern- ment of India and distributed between, the Union and the States in the manner provided in clause (2) of this article. 40 (2) Such percentage, as may be prescribed, of the net proceeds in any financial year of any such 252 THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 220 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES

tax, except in so far as those proceeds represent proceeds attributable to States for the time being specified in Part II of the First Schedule or the saxes payable in respect of Union emoluments, shall not form part of the revenues of India, but shall be assigned to the States within which that tax is leviable in that year, and shall be distributed among those States in such manner and from such time as may be prescribed. 5 (3) For the purposes of clause (2) of this article : in each financial year such percentage as may be prescribed of so much of the net proceeds of taxes on income as does not represent the net proceeds of taxes payable in respect of Union emoluments shall be deemed to represent proceeds attributable to States for the time being specified in Part II of the First Schedule. 10 15 (4) In this article— (a) “taxes on income” includes any sum levied by the Government of India in lieu of any tax on income as referred to in clause (a) of the proviso to article 266 of this Constitution but does not include a cor- poration tax; 20 (b) “prescribed” means— 25 (i) until a Finance Commission has been constituted, prescribed by the Presi- dent by order, and (ii) after a Finance Commission has been constituted, prescribed by the Presi- dent by order after considering the recommendations of the Finance Com- mission. 30 (c) “Union emoluments” includes all emolu- ments and pensions payable out of the revenues of India in respect of which in- come-tax is chargeable. 35 Surcharge on certain duties and taxes for purposes of the Union. 252. Notwithstanding anything contained in articles 250 and 251 of this Constitution, Parliament may at any time increase any of the duties or taxes referred to in those articles by a surcharge for pur- poses of the Union and the whole proceeds of any such surcharge shall form part of the revenues of India. 40 THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 253 221THE DRAFT CONSTITUTION

Taxes which are levied and collec- ted by the Union and may be distributed bet- ween the Union and the States. *253. (1) No duties on salt shall be levied by the Union. (2) Union duties of excise other than such duties of excise on medicinal and toilet preparations as are mentioned in the Union List shall be levied and col- lected by the Government of India, but, if Parlia- ment by law so provides, there shall be paid out of the revenues of India to the States to which the law imposing the duty extends, sums equivalent to the whole or any part of the net proceeds of that duty, and those sums shall be distributed among those States in accordance with such principles of distri- button as may be formulated by such law. 5 10 Distribution of duty on jute or jute products. 254. Notwithstanding anything in article 263 of this Constitution, such proportion, as Parliament may by law determine, of the net proceeds in each year of any export duty on jute or jute-products shall not form part of the revenues of India, but shall be assigned to the States in which jute is grown in accordance with such principles of distribution as may be formulated by such law: 15 20 Provided that until Parliament so determine, there shall be assigned to those States out of the net proceeds of the duty in each year such part thereof and in such proportions as may have been fixed in that behalf by any order made under the Government of India Act, 1935, and in force immediately before the commencement of this Constitution. 25 Grants from the Union to certain States, 255. Such sums, as Parliament may by law pro- vide, shall be charged on the revenues of India in each year as grants-in-aid of the revenues of such States as Parliament may determine to be in need of assistance, and different sums may be fixed for different States: 30 Provided that there shall be paid out of the revenues of India as grants-in-aid of the revenues of a State for the time being specified in Part I of the 35 * The majority of the members of the Committee are of opinion that there should be no constitutional prohibition regarding the duty on salt and its levy should be left to the discretion of Parlia- ment and accordingly clause (I) of this article is not necessary ; but Shri Alladi Krishnaswami Ayyar is of opinion that this clause should be retained. 254 THE GAZETTE OF INDIA EXTRAORDINARY, FEB. 26,1948 222 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES