Question

The report of Finance Commission on the distribution of tax proceeds between Central and State Governments _____________.

• A. will be binding on the Government
• B. will be binding on the Parliament
• C. will not be binding on the Government
• D. none of the above

Answer 1

The correct option is C will not be binding on the Government

The Finance Commission is set up every five years by the President under Article 280 of the Constitution. Its primary role is to recommend how the Union government should share taxes levied by it with the states. It also lays down rules by which the centre should provide grants-in-aid to states out of the Consolidated Fund of India.