Article 279

Calculation and Certification of Net Tax Proceeds by CAG

Official heading: “Calculation of “net proceeds”, etc.”

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Source edition: The Constitution of India (as on 1 May 2026)
Source locator: Part XII, Article 279, printed page 164
Last human source-link check: Not yet checked
Last human legal review: Not yet reviewed

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1. In One Sentence

Defines "net proceeds" of taxes as gross receipts minus cost of collection, making the certificate of the Comptroller and Auditor-General final and conclusive.

2. What It Means in Everyday Language

Whenever the Constitution commands that the proceeds of a tax be shared with or assigned to States (under Articles 268, 269, 269A, or 270), it specifies "net proceeds".

Article 279 defines "net proceeds" as the gross revenue of the tax or duty reduced by the cost of its collection.

Under clause (1), the net proceeds of any tax or duty attributable to any area are ascertained and certified by the Comptroller and Auditor-General of India (CAG).

Crucially, the certificate of the Comptroller and Auditor-General is final, conclusive, and immune from legal or political dispute.

3. Practical Illustrative Example

Everyday Scenario:

The Central Board of Direct Taxes collects gross corporation tax, but States want an independent, audited accounting of the exact cost of collection deducted before tax devolution.

Core takeaway: Under Article 279(1), the Comptroller and Auditor-General independently audits the figures and issues an official Certificate of Net Proceeds that binds both Union and States.

Illustrative Notice: The CAG’s certification is final and conclusive; neither Parliament nor a State Assembly can reopen the audited calculation of collection costs.

4. Important Limits, Qualifications & Exceptions

Article 279 provides an independent, objective accounting foundation for federal tax sharing.

Net proceeds formula: Gross tax receipts minus actual cost of collection.
CAG certification: Calculated and officially certified by the Comptroller and Auditor-General.
Conclusive finality: The CAG certificate is legally final and binding on all governments.

5. Operative Constitutional Text

(1) In the foregoing provisions of this Chapter, “net proceeds” means in relation to any tax or duty the proceeds thereof reduced by the cost of collection, and for the purposes of those provisions the net proceeds of any tax or duty, or of any part of any tax or duty, in or attributable to any area shall be ascertained and certified by the Comptroller and Auditor-General of India, whose certificate shall be final. (2) Subject as aforesaid, and to any other express provision of this Chapter, an Act of Parliament or an order of the President may, in any case where under this Part the proceeds of any duty or tax are, or may be, assigned to any State, provide for the manner in which the net proceeds are to be calculated, for the time from or at which and the manner in which any payments are to be made, for the making of adjustments between one financial year and another, and for any other incidental or ancillary matters.

Transcription for reference; compare with the linked official editionNot yet verified by a human legal reviewer

6. Sources & Historical Assembly Deliberations

Assembly quotations are withheld until wording, dates, and attribution have been checked against the primary record.

Sources & Citation Metadata

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Constitutional TextThe Constitution of India (as on 1 May 2026)Cited PDF page
Government of India (Legislative Department, Ministry of Law and Justice) • Part XII, Article 279, printed page 164 • Human source-link check pending
Primary PDF accessed and transcribed with AI assistance on 14 October 2026. Formatting and amendment annotation markers are omitted; operative wording is retained. This is not human legal review. Later amendments and commencement notifications have not been comprehensively checked.

Human legal review is pending; compare the text with the cited editionNon-partisan educational resource