Inter-government tax immunities in India are governed by Articles 285 to 289 of the Constitution. These articles provide certain exemptions and privileges to the central and state governments with respect to taxes.
Article 285: Exemption of Property of the Union and States from Union Taxes
- Article 285 grants immunity to the property and income of the central and state governments from Union taxes.
- It ensures that the properties owned by the central and state governments are not subject to taxation by the Union government.
Article 286: Restrictions as to Imposition of Tax on the Sale or Purchase of Goods
- Article 286 lays down certain restrictions on the power of the Union and state governments to impose taxes on the sale or purchase of goods.
- It provides that no law of a state shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place outside the state or in the course of import/export.
Article 287: Exemption of Property of a State from State Taxes
- Article 287 grants immunity to the property and income of a state from state taxes.
- It ensures that the properties owned by a state government are not subject to taxation by that state.
Article 288: Exemption from Tax on Electricity
- Article 288 exempts the property of the Union or a state from any tax on electricity.
- It ensures that electricity generated or supplied by the government is not subject to taxation.
Article 289: Exemption from Tax on Income, Property, etc., of a State from Union Taxes
- Article 289 provides exemptions to a state or any of its municipalities or other local authorities from certain Union taxes on income, property, etc.
- It ensures that the income and property of a state or its local authorities are not subject to taxation by the Union government.
