Consider the following statements about lsquo Net Proceeds rsquo of any tax or duty in India 1 ...........

Economic Affairs Tax System

Consider the following statements about ‘Net Proceeds’ of any tax or duty in India

1. As per Article 280 Net Proceeds of any tax or duty in India is calculated as the proceeds of the tax or duty minus the cost of collection.

2. As per the article the Finance commission is to ascertain and certify the Net Proceeds and its certification in this regard is final.

Select the correct answer using codes given below

1 only

2 only

Both are correct

None is correct

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Explanation:

Article 280 is about Finance commission and it talks not about Net Proceeds but about the distribution of net proceeds between centre and states. Article 279(1) is the article dealing with the Net Proceeds.
Also, these are certified by CAG and the decision of CAG is final in this regard.
It was in news as CAG reported that centre owes 80000 crores to states in net proceeds after the change in calculation methodology of revenue sharing between centre sates post 80th amendment.