Article 271 of Indian Constitution empowers Parliament to impose surcharges on taxes and duties specified in Articles 269 and 270 for Union purposes. These surcharges are credited to the Consolidated Fund of India and used exclusively for Union needs. While GST is exempt, Article 271 provides flexibility, enabling Parliament to enhance these taxes or duties without restrictions imposed by Articles 269 and 270. Explore other important Articles in depth in Constitutional Articles.

Article 271 of Indian Constitution

Surcharge on certain duties and taxes for purposes of the Union

Notwithstanding anything in articles 269 and 270, Parliament may at any time increase any of the duties or taxes referred to in those articles [except the goods and services tax under article 246A,] by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India.

Note: "The information is referred from the official website of the Indian Code and is for reference only. Original laws and orders remain untouched.

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Article 271 of the Indian Constitution: Simplified Interpretation

Article 271 allows Parliament to levy surcharges on Union taxes, excluding GST, for boosting revenue and addressing national expenditures. Here's a simplified interpretation of this Article of Indian Constitution in points:

• Parliament's Power: Grants Parliament the authority to impose surcharges on taxes and duties listed in the Union List.
• Exclusion of GST: Goods and Services Tax (GST) governed separately under Article 246A are excluded from such surcharges.
• Additional Revenue: Surcharges are levied in addition to existing taxes, enabling the Union government to generate extra revenue when needed.
• Allocation of Proceeds: Article 271 of Indian Constitution allocates revenue through these surcharges and is credited to the consolidated fund of India.
• National Use: These funds are utilised for purposes of national interest and expenditures determined by the Union government.
• Fiscal Flexibility: Provides financial adaptability to address unforeseen economic demands or national priorities.
• Economic Significance: Strengthens the Union's financial position while adhering to constitutional provisions.

Article 271 of the Indian Constitution signifies the importance of imposing surcharges on taxes and duties specified in the Union list and Here's the significance of Article 271 of Indian Constitution explained in points:

• Empowers Revenue Generation: It allows the parliament to impose surcharges on taxes and duties to meet financial requirements that ensure flexibility in revenue collection.
• Exclusion of GST: This Article specifies the exclusion of Goods and Services Tax, which is governed under Article 246A that emphasises its unique role in tax legislation.
• Consolidated Fund Utilization: Article 271 of Indian Constitution ensures that the proceeds from surcharges are added to the Consolidated Fund of India, which enables the fulfilment of the requirement for national expenditures.
• National Financial Support: Provides the Union government with an additional tool to address unforeseen economic challenges or specific fiscal priorities.
• Strengthening Fiscal Balance: This Article supports the Union Government to maintain a stable and robust financial system while sticking to Article 271 of constitution of India guidelines.
• Adaptability: Article 271 of Indian Constitution reflects the Constitution's insight the granting of flexibility to tackle evolving financial and governance needs. This article highlights its critical role in India's financial framework and governance structure.

Article 271 of Indian Constitution: Landmark Cases

These cases illustrate the judicial interpretation of Article 271 in India's taxation framework. The following are some of the landmark judgements related to Article 271 of the Indian Constitution.

Commissioner of Income Tax, Kerala v. K. Srinivasan (1971) 

The Supreme Court cleared that the Income tax under Section 2 of the Finance Act includes surcharges and additional surcharges. These surcharges are considered integral to income tax and super tax aligning with Article 271 of Indian Constitution. The court emphasised that surcharges are levied for Union purposes and are part of the Union's taxation framework.

These judgments re-ensured the Union's authority to implement surcharges as additional taxes that ensure their inclusion in tax calculations and support the financial flexibility envisioned under Article 271.

Deshnur Wine Stores v. State of Karnataka (1984)

The Karnataka High Court examined the constitutional validity of Section 6c of the Karnataka Sales Tax Act, 1957, which introduced a surcharge on taxes. The court ruled that the surcharge was constitutionally valid and did not violate Article 271 of Indian Constitution. It emphasised that Article 271 empowers Parliament to impose surcharges for Union purposes, but this does not restrict States from levying surcharges under their legislative competence. The judgment upheld the State's authority to impose additional taxes within the framework of the Constitution.

Ernakulam Radio Company v. State of Kerala (1966)

The Kerala High Court upheld the constitutional validity of the Kerala Surcharge on Taxes Act, 1957. The court ruled that the surcharge on sales tax was not an independent tax but an enhancement of the existing sales tax. It clarified that such surcharges fell within the legislative competence of the State under Entry 54 of List II in the Seventh Schedule of the Constitution. High Court emphasised in the Ernakulam Radio Company v. State of Kerala Judgment that the surcharges included with Article 271, reinforcing the principle that states composite additional taxes within their constitutional powers.

Article 271 of the Indian Constitution shows how flexible India's tax system is in meeting financial needs. It gives Parliament the power to add surcharges to taxes and duties from the Union List, helping the Union Government raise extra funds. The money from these surcharges goes into the Consolidated Fund of India and is used for national expenses, ensuring financial responsibility. GST, however, is excluded from this under Article 264A. This article distinguishes between regular taxes and surcharges. It reflects how the Constitution's framers planned ahead to enable the Union Government to handle unexpected financial demands. Article 271 of the Constitution highlights the balance between adapting to new needs and following constitutional rules in managing India's financial systems.