80th amendment- its HISTORY and introduction to 10th finance commission

Amendments are made to modify the constitution as per the changing conditions required through various acts.

Very first amendment was held in 1951 that Enable the state to make socially and economically backward classes progress, 9th schedule in our constitution to protect land reform and the judicial review had other rules in it and many more. No. of amendment till Jan 2020 is 104 and the latest amendment till then has extended the reservation of seats for SC and STs in state assemblies and Lok Sabha.

Brief about 80th amendment

On the basis of the recommendations of the Tenth Finance Commission, the Constitution (Eightieth Amendment) Act, 2000 enacted an alternative scheme for tax sharing between the Union and the State.

Under this transfer scheme between the Union and the States, 26% of the gross proceeds of Union taxes and duties are to be distributed to the States in lieu of their existing share of income taxes, excise duties, special excise duties and grants in place of taxes on rail passenger fares.

President at the time of 80th amendment was K R NARAYAN and Prime minister was Shri Atal Bihari Vajpayee.

Brief about tenth finance commission

The Finance Commission is a legislative body with a view to the distribution between the Union and the State Governments of such revenue resources. It was created by the Indian President under Article 280 of the Indian Constitution. To define the financial ties between the Centre and the states, it was established. In 1951, it was created.

In accordance with Article 280 of the Constitution, the Finance Commission has been set up by the President for five years. Its main function is to recommend how the government of the Union should share with the states the taxes it levies. These recommendations cover a five-year period. Member of 10th finance commission was Dr. Debi Prasad Pal, Member of Parliament, Shri B.P.R. Vithal, Dr. C. Rangarajan, Shri M.C. Gupta.  Shri Manu R. Shroff, In place of Dr. C. Rangarajan, Shri Arun Sinha, Member Secretary (in place of M.C. Gupta)

This finance commission was established in 1992 and was headed by Shri Krishna Chandra Pant. In the year 1995, the Tenth Finance Commission was incorporated. The tenth Finance Commission will make recommendations for the allocations of the net proceeds of taxes between the Union and the states and also on the norms related to the grants-in-aid allotted to the states to increase their revenue. Other activities concerning the Tenth Finance Commission include the recommendation of improvements to the net proceeds with regard to the additional excise duties on commodities under the Additional Duties of Excise (Goods of Special Importance) Act of 1957 on the position of sales tax on commodities. The elimination of the levy on rail travelers, the determination of the population element for the degeneration of state taxes, duties and grants, and, ultimately, the Commission’s study of the existing Calamity Relief Fund scheme.

History of 80th amendment 2000

  • On 26 November 1994, the Tenth Finance Commission submitted its report for a period of five years, that is to say, from 1995-96 to 1999-2000. On 14 March 1995, the report was laid on the table of both the Houses of Parliament. An alternate scheme of sharing the profits of some taxes and duties of the Union between the Union and the States is one of the recommendations of the Commission which has been considered by the Government.
  • The alternative scheme envisages that twenty-six per cent out of the gross proceeds of Union taxes and duties (excluding stamp duty, excise duty on medicinal toilet preparations, Central Sales Tax, Consignment tax, cases levied for specific purposes under any law made by Parliament and Surcharge) is to be assigned to the States in lieu of their existing share in income-tax, basic excise duties, special excise duties and grants in lieu of tax on railway passenger fares.
  • In addition, three per cent of the gross proceeds of all the central taxes and duties (excluding the stamp duty, the excise duty on medicinal/toilet preparations, the Central Sales Tax, the Consignment Tax, the termination imposed for particular purposes pursuant to any legislation of the Parliament and the Surcharge) shall be distributed to the States in place of their current shares in the Additional Excise Duties instead of the Sales Tax on tobacco, cotton and sugar. The Commission recommended that tobacco, cotton and sugar should continue to be excluded from the sales tax and that the extra excise duties should be merged with the regular excise duties instead of the sales tax on these products.
  • Whether the alternative system would make the Centre or the States more efficient in comparison to the current arrangements would depend entirely on the relative increase in the collection of the various central taxes and duties to be pooled.
  • Article that was amended are 269, 270 and 272.

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