The power to impose taxes is vested in the:
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A.
Parliament
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B.
State Legislature
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C.
Both A and B
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D.
Finance Commission
Correct Answer:
C. Both A and B
Explanation:
Under the Constitution of India, the power to levy and collect taxes is not an absolute executive power but must be grounded in specific legislative authority. According to Article 265, no tax can be imposed or collected except by the authority of law, which means a formal statute must be passed by a competent legislature. The Seventh Schedule further delineates this authority through three lists: the Union List (List I), which grants the Parliament exclusive power to tax subjects like non-agricultural income and customs; the State List (List II), which empowers State Legislatures to tax items such as land revenue and liquor; and the Concurrent List (List III), which generally does not cover taxation to avoid jurisdictional conflicts. Additionally, Articles 243H and 243X allow State Legislatures to authorize Panchayats and Municipalities to levy and collect specific local taxes. Therefore, the power to impose taxes is shared between the Parliament and State Legislatures based on their respective constitutional jurisdictions.
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