Article 270 of the Constitution of India: Taxes Levied and Distributed Between the Union and the States
Article 270 governs the distribution of specified Union taxes and duties between the Union and the States. Its present form reflects the Eightieth Constitutional Amendment and the GST-related changes made by the Constitution (One Hundred and First Amendment) Act, 2016.
Updated: 19 September 2026
What does Article 270 mean?
Article 270 is a constitutional rule for fiscal federalism. It identifies the broad pool of Union taxes and duties that are to be shared with the States, while excluding specified constitutional categories such as duties and taxes dealt with under Articles 268, 269 and 269A, surcharges under Article 271, and cesses levied for specific purposes under a law made by Parliament.
The expression "prescribed" in Article 270 means prescribed by the President by order. After a Finance Commission has been constituted, the President acts after considering the recommendations of the Finance Commission.
Current text of Article 270
270. Taxes levied and distributed between the Union and the States.
(1) All taxes and duties referred to in the Union List, except the duties and taxes referred to in articles 268, 269 and 269A, respectively, surcharge on taxes and duties referred to in article 271 and any cess levied for specific purposes under any law made by Parliament shall be levied and collected by the Government of India and shall be distributed between the Union and the States in the manner provided in clause (2).
(1A) The tax collected by the Union under clause (1) of article 246A shall also be distributed between the Union and the States in the manner provided in clause (2).
(1B) The tax levied and collected by the Union under clause (2) of article 246A and article 269A, which has been used for payment of the tax levied by the Union under clause (1) of article 246A, and the amount apportioned to the Union under clause (1) of article 269A, shall also be distributed between the Union and the States in the manner provided in clause (2).
(2) Such percentage, as may be prescribed, of the net proceeds of any such tax or duty in any financial year shall not form part of the Consolidated Fund of India, but shall be assigned to the States within which that tax or duty is leviable in that year, and shall be distributed among those States in such manner and from such time as may be prescribed in the manner provided in clause (3).
(3) In this article, "prescribed" means -
(i) until a Finance Commission has been constituted, prescribed by the President by order, and
(ii) after a Finance Commission has been constituted, prescribed by the President by order after considering the recommendations of the Finance Commission.
For the authoritative constitutional text, see the Constitution of India published by the Legislative Department, Ministry of Law and Justice.
How GST changed Article 270
The Constitution (One Hundred and First Amendment) Act, 2016 changed Article 270 as part of the constitutional framework for Goods and Services Tax. It substituted the reference in clause (1) so that Articles 268, 269 and 269A are recognised, and inserted clauses (1A) and (1B).
Clause (1A) brings tax collected by the Union under Article 246A(1) within the Article 270 distribution mechanism. Clause (1B) addresses specified GST amounts involving Article 246A(2) and Article 269A, including amounts apportioned to the Union under Article 269A(1).
Article 269A separately governs GST on supplies in the course of inter-State trade or commerce and provides for apportionment between the Union and the States in the manner provided by Parliament by law on the recommendations of the GST Council.
See the Constitution (One Hundred and First Amendment) Act, 2016 on the CBIC GST portal and the Integrated Goods and Services Tax Act, 2017 on India Code.
Role of the Finance Commission under Article 270
Article 280 requires a Finance Commission to make recommendations on the distribution between the Union and the States of the net proceeds of taxes that are divisible under Chapter I of Part XII and on the allocation of the States' share among the States. Article 270 and Article 280 therefore operate together in the constitutional system of tax devolution.
For the award period 2026-27 to 2030-31, the Sixteenth Finance Commission has submitted its report. Its official report addresses vertical devolution, horizontal devolution, grants-in-aid and related fiscal matters.
Official resource: Report of the Sixteenth Finance Commission for 2026-2031.