🧾 Article 279 of the Indian Constitution
Title: Calculation of "net proceeds" for the purposes of the provisions of this Chapter.
🔍 Explanation:
Article 279 provides the definition and authority for calculating the "net proceeds" of taxes, which is critical for the distribution of central taxes between the Centre and States.
📘 Key Provisions of Article 279:
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"Net Proceeds" Definition:
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It means the gross proceeds of a tax minus the cost of collection.
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This is important when dividing tax revenue between the Union and States (as under Article 270 and 280).
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Comptroller and Auditor-General (CAG):
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The CAG of India certifies what constitutes the "net proceeds".
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The CAG's certificate is final and binding.
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📊 Chart Summary:
| Feature | Details |
|---|---|
| Article | 279 |
| Focus | Calculation of "net proceeds" of taxes |
| Definition | Gross proceeds – cost of collection |
| Who certifies? | Comptroller and Auditor-General of India |
| Binding Nature | CAG's certification is final |
| Purpose | Used for sharing revenue between Centre and States |
🧮 Why Article 279 is Important:
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Ensures transparency and accountability in tax revenue sharing.
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Prevents disputes between Union and States by giving CAG the final word.
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Forms the financial foundation for recommendations of the Finance Commission.
Here is a comparison chart of Articles 278, 279, and 280 of the Indian Constitution to help you understand their differences, purposes, and evolution in the context of financial matters:
📊 Comparison Chart: Articles 278, 279, and 280
| Feature | Article 278 | Article 279 | Article 280 |
|---|---|---|---|
| Title | Agreements with Part B States | Calculation of "net proceeds" | Finance Commission |
| Purpose | Temporary financial arrangements with former princely states | Defines and certifies the shareable revenue | Recommends financial distribution between Centre and States |
| Applies to | Only Part B States (e.g. Hyderabad, Mysore – now merged) | All Union-collected taxes | All States and Centre |
| Certified by | Agreements (no certification authority) | CAG of India (final authority) | Recommendations made by Finance Commission |
| Binding Nature | Based on mutual agreement | CAG's certificate is final | Advisory, but generally followed |
| Repealed or Active? | ❌ Repealed (7th Amendment, 1956) | ✅ Still in force | ✅ Still in force |
| Modern Role | Obsolete – Replaced by Finance Commission | Supports Article 270 (tax distribution) | Key constitutional body for Centre-State fiscal relations |
| Key Evolution | Transitional arrangement post-independence | Ensures clarity in revenue distribution calculations | Provides structured financial devolution every 5 years |
🔄 Evolution Flow (Visual)
[Article 278: Temporary Agreements with Part B States] (1950–1956)
↓ (Repealed by 7th Amendment)
[Article 279: CAG certifies Net Proceeds] → Supports Article 270 & 280
↓
[Article 280: Finance Commission] → Recommends sharing of revenue & grants
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