Home The Constitution Part XII Article 268

Art. 268 Part XII: Finance, Property, Contracts and Suits

Duties Levied by the Union but Collected and Appropriated by the States

Exact text — Constitution of India

(1) Such stamp duties and such duties of excise on medicinal and toilet preparations as are mentioned in the Union List shall be levied by the Government of India but shall be collected—(a) in the case where such duties are leviable within any Union territory, by the Government of India; and (b) in other cases, by the States within which such duties are respectively leviable. (2) The proceeds in any financial year of any such duty leviable within any State... shall not form part of the Consolidated Fund of India, but shall be assigned to that State.

In Plain English

What this Article actually means

This Article creates a specific revenue-sharing arrangement for particular duties (like certain stamp duties): Parliament sets the rate and legal framework, but STATES actually collect the money, and crucially, the proceeds go entirely to that state rather than into the central Consolidated Fund — a targeted example of the many different revenue-sharing mechanisms Part XII establishes.

Why This Matters To You

How it shows up in everyday life

This is why some taxes you pay are legally 'Union' taxes in name (set by central law) but the money you pay actually stays with your state government — a nuance in India's fiscal federalism that isn't always obvious from the tax's formal classification.

Read alongside this one

Art. 269 — Taxes Levied and Collected by the Union but Assigned to States

Frequently Asked

Quick answers about Article 268

If a duty is 'levied by the Union', doesn't the money go to the central government?

Not necessarily — this Article shows that for specific duties like these stamp duties, 'levied by the Union' just means the Union sets the legal framework and rate; the actual revenue collected is assigned entirely to the state where it's collected.

← PreviousArticle 267: Contingency Fund Next →Article 268A: (Repealed) Service Tax Levied by Union and Collected and Appropriated by the Union and the States

The text above reproduces Article 268 of the Constitution of India as amended to date, for general educational reference. It is public-domain legislative text, but we recommend cross-checking the authoritative version at legislative.gov.in or india.gov.in before relying on it for a legal matter. The explanation, examples and FAQs are general information, not legal advice — consult a qualified advocate for guidance on your specific situation.