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Which body recommends how the net proceeds of shareable Union taxes are distributed between the Union and the States?

Question and options

Which body recommends how the net proceeds of shareable Union taxes are distributed between the Union and the States?

  1. The Finance Commission

  2. The National Development Council

  3. NITI Aayog

  4. The Inter-State Council

Answer and explanation

Correct answer: A - The Finance Commission

Under Article 280(1) and Article 280(3)(a)-(b) of the Constitution of India, the Finance Commission constituted by the President makes recommendations regarding the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under Part XII, Chapter I, and the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India.

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