What is Article 287 of Indian Constitution – Defination & Meaning

Article 287: Exemption from taxes on electricity Save in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the
📅 Part XII – Finance, Property, Contracts and Suits
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Article Number

287

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Part XII – Finance, Property, Contracts and Suits

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Bare Acts Text

Article 287: Exemption from taxes on electricity

  • Save in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the consumption or sale of electricity (whether produced by a Government or other persons) which is —
    • (a) consumed by the Government of India, or sold to the Government of India for consumption by that Government; or
    • (b) consumed in the construction, maintenance or operation of any railway by the Government of India or a railway company operating that railway, or sold to that Government or any such railway company for consumption in the construction, maintenance or operation of any railway,
  • and any such law imposing, or authorising the imposition of, a tax on the sale of electricity shall secure that the price of electricity sold to the Government of India for consumption by that Government, or to any such railway company as aforesaid for consumption in the construction, maintenance or operation of any railway, shall be less by the amount of the tax than the price charged to other consumers of a substantial quantity of electricity.
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Full Definition & Explanation

Article 287 of the Indian Constitution provides a tax exemption on electricity consumed or sold to the Government of India. This means that no state can impose a tax on electricity that is used by the government or sold to it. This exemption is key for ensuring that government operations, such as public transportation and infrastructure maintenance, are not burdened by additional costs. It enables the government to allocate more resources to necessary services without the added burden of taxation on electricity consumption. Also, the article also applies to electricity used in the construction, maintenance, or operation of railways. This includes any electricity sold to railway companies that is necessary for their operations. By exempting these services from state taxes, the Constitution aims to promote efficient railway operations and, consequently, better public transport options. The goal is to create a smoother, more effective transportation network that is necessary for economic growth and public welfare. In practical terms, when a state imposes a tax on electricity, it must ensure that the electricity sold to the government is priced lower than what is charged to other consumers. This provision helps maintain fairness in pricing and ensures that public services are not adversely affected by state taxation. Overall, Article 287 plays a major role in supporting governmental functions while keeping costs manageable for necessary services like railways and electricity distribution.

Historical Context

This means that no state can impose a tax on electricity that is used by the government or sold to it. This exemption is key for ensuring that government operations, such as public transportation and infrastructure maintenance, are not burdened by additional costs. It enables the government to allocate more resources to necessary services without the added burden of taxation on electricity consumption. Also, the article also applies to electricity used in the construction, maintenance, or operation of railways. Article 287 of the Indian Constitution provides a tax exemption on electricity consumed or sold to the Government of India. This includes any electricity sold to railway companies that is necessary for their operations.

Key Features

– Article 287 prohibits state taxes on electricity sold to the Government of India.
– It covers electricity used in railway construction and operations.
– Taxed electricity must be priced lower for the Government than for others.
– The article supports efficient government operations and public services.
– It ensures fairness in electricity pricing for government services.

Importance & Impact

– This article helps ensure that government operations remain financially feasible and efficient.
– It encourages the development and maintenance of necessary railway infrastructure across India.
– The exemption allows better allocation of resources to key public services and projects.
– It fosters a fair pricing system for government electricity consumption, benefiting taxpayers.
– This provision aids in the smooth functioning of necessary services like transportation.

Sample UPSC Question

Consider the following statements regarding Article 287 of the Indian Constitution: 1. It exempts electricity consumed by the Government of India from state taxes. 2. It applies only to electricity sold for railway operations. 3. States can charge taxes on electricity sold to private consumers. Which of the statements is/are correct? A. Only 1 and 2 B. Only 1 and 3 C. 1, 2, and 3 D. Only 2 and 3

Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer

The correct answer is B. Article 287 exempts electricity sold to the Government of India from state taxes, making statement 1 correct. However, statement 2 is incorrect, as it is not limited to railways only. Statement 3 is accurate since states can charge taxes on electricity for private consumers.

Key Takeaways

✓ Article 287 exempts government electricity consumption from state taxes.
✓ It supports railway operations by exempting related electricity usage.
✓ States must charge lower prices for government electricity due to tax exemption.
✓ The article promotes efficient government functions and public services.
✓ It ensures fairness in electricity pricing for governmental needs.

FAQs

Article 287 of the Indian Constitution provides a tax exemption on electricity consumed or sold to the Government of India. This means that no state can impose a tax on electricity that is used by the government or sold to it. This exemption is key for ensuring that government operations, such as public transportation and infrastructure maintenance, are not burdened by additional costs.

This includes any electricity sold to railway companies that is necessary for their operations. By exempting these services from state taxes, the Constitution aims to promote efficient railway operations and, consequently, better public transport options. The goal is to create a smoother, more effective transportation network that is necessary for economic growth and public welfare.

In practical terms, when a state imposes a tax on electricity, it must ensure that the electricity sold to the government is priced lower than what is charged to other consumers. This provision helps maintain fairness in pricing and ensures that public services are not adversely affected by state taxation. Overall, Article 287 plays a major role in supporting governmental functions while keeping costs manageable for necessary services like railways and electricity distribution.

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