The Finance Commission is a constitutional body in India responsible for recommending the distribution of financial resources between the Union government and the State governments.
Article 280:
- Establishment of Finance Commission: Article 280 of the Constitution provides for the establishment of a Finance Commission by the President of India every five years or at such earlier time as he considers necessary.
- Composition: The Commission consists of a Chairman and four other members, appointed by the President.
- Qualifications and Tenure: The members of the Commission must have qualifications and experience as prescribed by the President. They serve for a period specified by the President.
- Functions: The Commission is tasked with recommending the distribution of taxes and grants-in-aid between the Union and States, as well as examining any other matter relating to finance referred to it by the President.
2. Article 281:
- Recommendations of the Finance Commission: Article 281 stipulates that the recommendations of the Finance Commission, together with an explanatory memorandum as to the action taken thereon, shall be laid before each House of Parliament.
3. Article 282:
- Grants from the Union to States: Article 282 empowers the Union government to make grants to the States for any public purpose, notwithstanding that such purpose is not one with respect to which Parliament may make laws.
4. Article 283:
- Custody of Consolidated Funds and Contingency Funds: Article 283 lays down that all revenues received by the government of India, all loans raised by the Union government, and all moneys received by the Union government in repayment of loans shall form one consolidated fund, to be entitled “the Consolidated Fund of India”.
5. Article 284:
- Custody of Public Moneys: Article 284 provides that no moneys out of the Consolidated Fund of India or the Consolidated Fund of any State shall be appropriated except in accordance with law and for the purposes and in the manner provided in this Constitution.
6. Article 285:
- Exemption of property of the Union from State taxation: Article 285 stipulates that the property of the Union shall be exempt from all taxes imposed by a State or by any authority within a State.
7. Article 286:
- Restrictions as to imposition of tax on the sale or purchase of goods: Article 286 lays down certain restrictions on the power of States to impose tax on the sale or purchase of goods.
