Explanation
The Constitution of India has vested the ‘residuary powers’ with the Centre. But, the final authority to decide whether a matter falls under the list of residuary powers or not, rests with the Supreme Court because it is the judiciary which decides whether any matter falls under residuary list or not. The Judiciary is the final authority to pronounce verdict on the issue like any other issue.
India has a three-tier tax structure, wherein the constitution empowers the union government to levy income tax, tax on capital transactions, sales tax, service tax, customs and excise duties and the state governments to levy sales tax on intrastate sale of goods, tax on entertainment and professions, excise duties on manufacture of alcohol, stamp duties on transfer of property and collect land revenue.
The Indian Constitution seeks to maintain the balance of power between the Centre and States by providing for a federal system of government. However, the term 'federation' has nowhere been used in the Constitution. Article 1 of the Indian Constitution describes 'India, that is Bharat' as a 'Union of States', an expression which implies two things. Firstly, the Indian federation is not the result of an agreement between the States. Secondly, the states do not have a right to secede from the federation. In fact, the States of the Indian federation have no independent existence of their own. Parliament can alter their names and territories without their consent.
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