Sovereign right to taxation

Context                                    

India is trying to keep the sovereign right of India to tax-absolutely intact by withdrawing the retrospective taxation amendment in the I-T Act introduced in March 2012.

What is the "sovereign right to tax"?

• In India, the Constitution gives the government of right to levy taxes on individuals and organizations, and makes it clear that no one has the right to levy or charge taxes except by the authority of law. Any tax which is charged has to be backed by a law passed by the legislature or Parliament.
• Taxes in India come under a three-tier system that is based on the Central, State, and local governments.
• The Seventh Schedule of the Constitution puts separate heads of taxation under the Union and State list.
• There is no separate head under the Concurrent list, meaning Union and the States have no concurrent power of taxation, as per the document.