'Inadvertent Omission' Denying Delhi Rs 6,500 Crore in Central Taxes: Kejriwal
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'Inadvertent Omission' Denying Delhi Rs 6,500 Crore in Central Taxes: Kejriwal

By Wire calender  19-Jul-2019

'Inadvertent Omission' Denying Delhi Rs 6,500 Crore in Central Taxes: Kejriwal

Delhi chief minister Arvind Kejriwal has in a letter to Union ministers Amit Shah and Nirmala Sitharaman pointed out an “inadvertent omission” of erstwhile Article 270(3) of the Constitution of India, under which the share of the net proceeds of income tax “attributable to the Union Territories” had to be prescribed. Due to this, he said, Delhi has been losing its “legitimate share” in Central taxes of nearly Rs 6,500 crore annually.
Stating that the omission took place when the Constitution (Eightieth Amendment) Act, 2000 was passed by parliament, Kejriwal has urged the Union home and finance ministers to rectify the anomaly so that Delhi gets its share.
In the letter, the Delhi CM noted that the Union Territory had a separate Consolidated Fund from December 1993. Thereafter, he said, the pattern of funding of Delhi’s budget changed from the year 1994-95 and came at par with other states.
“Till the year 2000,” Kejriwal wrote, “under the provisions of Article 280(3)(a) read with the article 270 of the Constitution, the task of the Union Finance Commission with respect to income tax was to make recommendations in regard to three matters — the percentage of the “net distributable proceeds” which shall represent the proceeds attributable to the Union Territories; the percentage of the divisible pool of the “net proceeds” of income tax to be assigned to the States; and the share of each State in the divisible pool.”
Accordingly, he said, all the Union finance commissions till the Tenth Finance Commission gave recommendations for resource sharing not only between the states and the Union but also for the Union Territories, including Delhi. 

Delhi lost its share following the 80th amendment
However, Kejriwal, who is a former Indian Revenue Service officer, pointed out in the year 2000, the Constitution (Eightieth Amendment) Act, 2000 was passed by the parliament for including corporation tax along with personal income tax in resource sharing between the states and Union of India.
The amended Act replaced Article 270 with a new set of provisions. In the new Article 270, the erstwhile article 270(3), which had the enabling provision for the Finance Commissions to give recommendations in respect of Union Territories, was omitted.


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