Articles 267 and 268 of the Constitution of India: Contingency Fund and Stamp Duties
Articles 267 and 268 form part of Part XII of the Constitution of India dealing with finance. Article 267 provides the constitutional basis for the Contingency Fund of India and State Contingency Funds. Article 268 deals with specified stamp duties that are levied by the Union but collected and appropriated according to the constitutional arrangement between the Union and the States.
Article 267 - Contingency Fund
Article 267 authorises the creation of contingency funds for the Union and the States. A contingency fund is in the nature of an imprest, meaning a fund kept available for advances to meet urgent and unforeseen expenditure before the expenditure receives the required legislative authorisation.
Article 267(1): Contingency Fund of India
Parliament may by law establish the Contingency Fund of India. Sums determined by law are paid into the Fund, which is placed at the disposal of the President. Advances may be made from it to meet unforeseen expenditure pending authorisation of that expenditure by Parliament under Article 115 or Article 116.
Article 267(2): Contingency Fund of a State
A State Legislature may by law establish a Contingency Fund of the State. The Fund is placed at the disposal of the Governor so that advances may be made for unforeseen expenditure pending authorisation by the State Legislature under Article 205 or Article 206.
What is the Contingency Fund of India?
The constitutional authority in Article 267(1) is implemented through the Contingency Fund of India Act, 1950. The Fund is designed to permit temporary advances for unforeseen expenditure while the ordinary parliamentary process for authorising that expenditure is completed.
An advance from the Contingency Fund is therefore not a substitute for legislative control over public expenditure. Article 267 itself links such advances to subsequent authorisation under the applicable constitutional provisions.
Article 268 - Duties levied by the Union but collected and appropriated by the States
Article 268 establishes a special constitutional arrangement for certain stamp duties mentioned in the Union List. The Government of India levies these duties, while responsibility for collection depends on where the duty is leviable.
Article 268(1): Levy and collection
Such stamp duties as are mentioned in the Union List are levied by the Government of India. Where they are leviable within a Union territory, they are collected by the Government of India. In other cases, they are collected by the State within which they are leviable.
Article 268(2): Assignment of proceeds to the State
The proceeds in a financial year of such duty leviable within a State do not form part of the Consolidated Fund of India. They are assigned to that State.
In simple terms, Article 268 separates the constitutional power to levy the specified duty from the collection and assignment of its proceeds. For duties leviable within a State, the State collects the duty and the proceeds belong to that State under the constitutional arrangement.
Important update: Article 268 after the Constitution (One Hundred and First Amendment) Act, 2016
This amendment formed part of the constitutional changes associated with the introduction of the Goods and Services Tax framework. Accordingly, older reproductions of Article 268 that still include the omitted words do not state the present consolidated text.
For the official consolidated constitutional text, see the Constitution of India published by the Legislative Department.
Difference between Article 267 and Article 268
Article 267 concerns emergency financial advances for unforeseen expenditure through the Union and State Contingency Funds. Article 268, by contrast, concerns the constitutional allocation of specified stamp duties between the Union and the States, including who levies, collects and receives the proceeds.
Related constitutional provisions
Article 267 should be read with Articles 115 and 116 for Union expenditure and Articles 205 and 206 for State expenditure. Article 268 is part of the wider constitutional scheme for distribution of revenues between the Union and the States, followed by Articles 269, 269A, 270 and related provisions.