Para 3.23.10 — MSO (Audit)
Original Rule Text
3.23.10 Under Article 272 of the Constitution, the whole or a part of the net proceeds of certain Union Excise Duties other than Duties of Excise on Medicinal and Toilet Preparations may be assigned to the States under the law made by Parliament in this behalf. Necessary legislation was enacted in terms of which, commencing from the year 1952-53, a part of the Union Excise Duties on certain commodities is paid to the States out of the Consolidated Fund of India. Under Article 279(1) of the Constitution, the net proceeds of such distributable Union Excise Duties are to be ascertained and certified by the Comptroller and Auditor General. The net proceeds to be assigned to the States in any financial year under Article 272 of the Constitution will be determined in accordance with the provisions of law enacted by Parliament in this behalf and further distribution of these net proceeds among the States will be regulated in accordance with the terms of the Distribution of Revenue Orders, issued from time to time.
What This Means
Under the Constitution, a portion of Union Excise Duties collected by the Central Government may be shared with State Governments. The CAG is constitutionally required to ascertain and certify the net proceeds of these distributable duties. The actual distribution among states is governed by Distribution of Revenue Orders issued from time to time based on Finance Commission recommendations.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Article 272 allows Parliament to assign part of Union Excise Duties to states
- 2This sharing has been in practice since 1952-53
- 3The CAG must ascertain and certify net proceeds under Article 279(1)
- 4Distribution among states follows the Distribution of Revenue Orders
- 5Medicinal and Toilet Preparation duties are excluded from this sharing
Practical Example
The CAG office calculates the net proceeds of Union Excise Duty on petroleum products for the financial year. After deducting refunds, drawbacks, and collection costs from gross revenue, they certify the net amount. This certified figure is then used by the Finance Ministry to distribute the states' share as per the current Distribution of Revenue Order.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why must the CAG certify net proceeds?▼
What are 'net proceeds'?▼
How is the share of each state determined?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.