Part XII: Finance, Property, Contracts and Suits
Article 277: Savings
Original Article:
Article 277 states: "Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law."
Explanations:
Article 277 ensures the continuity of local taxes, duties, and fees that were in force prior to the commencement of the Constitution. This provision avoids disruption in revenue collection and local governance while providing flexibility for future parliamentary laws.
Key Provisions:
Continuity of Pre-Constitution Levies
This provision allows taxes, cesses, and fees collected by states or municipalities before the Constitution to remain valid, even if they fall under the Union List, until overridden by Parliament.
Application of Revenue
The taxes or fees collected must continue to be applied for the same purposes as they were prior to the Constitution, ensuring consistency in local governance.
Supremacy of Parliamentary Law
While Article 277 preserves existing levies, it provides Parliament with the authority to override these provisions by enacting new laws.
Amendments:
No specific amendments have been made to Article 277; however, its relevance has been influenced by subsequent laws, such as the implementation of GST, which has subsumed many local taxes and duties.
Legislative History:
Introduced as Draft Article 257, it was debated on August 9, 1949, and incorporated into the Constitution with minimal changes to ensure smooth fiscal transitions during the early years of independence.
Debates and Deliberations:
- Dr. B.R. Ambedkar emphasized the need for a transitional mechanism to preserve local revenues during the shift to a constitutional framework.
- Shri K. Santhanam highlighted the importance of this provision in maintaining financial stability for local bodies.
Frequently Asked Questions (FAQs):
To ensure the continuation of local taxes, duties, and fees until Parliament enacts laws to the contrary.
Yes, Parliament has the authority to enact laws that override the provisions of Article 277.
The implementation of GST has subsumed many local taxes, reducing the scope of Article 277, though it remains relevant for other levies not covered under GST.
References:
- Constituent Assembly Debates, August 9, 1949
- Judicial interpretations regarding local taxation
- GST Act and its impact on local taxes