Prior recommendation of President required to Bills affecting taxation in which States are interested

Article 274, Constitution of India 1950

(1) No Bill or amendment which imposes or varies any tax or duty in which States are interested, or which varies the meaning of the expression “agricultural income” as defined for the purposes of the enactments relating to Indian income-tax, or which affects the principles on which under any of the foregoing provisions of this Chapter moneys are or may be distributable to States, or which imposes any such surcharge for the purposes of the Union as is mentioned in the foregoing provisions of this Chapter, shall be introduced or moved in either House of Parliament except on the recommendation of the President.

(2) In this article, the expression “tax or duty in which States are interested” means—

Draft Article 254A (Article 274) was debated on 8 August 1949. It was not initially included in the Draft Constitution of India, 1948. Instead, the Chairman of the Drafting Committee proposed to insert the following as Draft Article 254A in the Constituent Assembly:

“…Prior recommendation of President required to Bills affecting taxation on which States are interested.

254A. (1) No Bill or amendment which imposes or varies any tax or duty in which states are interested, or which varies the meaning of the expression ‘agricultural income’ as defined for the purposes of the enactments relating to Indian Income-tax or which affects  the principles on which under any of the foregoing provisions of this Chapter moneys are or may be distributable to States, or which imposes any such surchage for the purposes of the Union as it mentioned in the foregoing provisions of this Chapter, shall be introduced or moved in either House of Parliament except on the recommendation of the President.

(2) In this article the expression ‘tax or duty in which States are interested’ means- 

(a) a tax or duty the whole or part of the net proceeds whereof are assigned to any State; or 

(b) a tax or duty by reference to the net proceeds whereof sums are for the time being payable out of the Consolidated Fund of India to any State.”

The Draft Article states that any Bill related to taxes or duties in which States might have an interest can only be introduced in the Parliament after obtaining the recommendation of the President.

A Member opposed the Draft Article claiming that the provision was an attempt to encroach on the powers of the States. Another Member raised an objection to the Draft Article stating that it infringed the ‘inherent right of the Members of the Parliament.’

There was no further discussion on the Draft article.

Draft Article 254A was adopted on 8 August 1949.