It was introduced by Ajit Kumar Panja, then Minister of State in the Department of Revenue in the Ministry of Finance.
[3] The full text of the Statement of Objects and Reasons appended to the bill is given below: Clause (2) of article 276 of the Constitution specifies that the total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other local authority in a State by way of taxes on professions, trades, callings and employments leviable by a State Legislature under clause (1) of that article shall not exceed two hundred and fifty rupees per annum.
The proviso to that clause, however, enables the continuance of the levy of such tax at a rate exceeding two hundred and fifty rupees per annum in any State, municipality, etc., if in the financial year immediately preceding the commencement of Constitution there was in force in that State, municipality, etc., any such tax exceeding that rate.
Some of the State Governments have represented that this celling of two hundred and fifty rupees which was fixed in 1949, needs to be revised upwards taking into consideration the price rise and other factors.
The upward revision of profession tax will also help the State Governments in raising additional resources.