Explain the financial relations between the union and the states.

 Some certain taxes are levied by center and collected by the state, i.e. stamp duty
and the taxes on production of medicines, etc.
 Taxes are levied and collected by the parliament but are distributed among the
states, i.e. terminal taxes, taxes on interstate trade and commerce and duties on
succession of property other than agricultural land.
 Certain taxes are levied and collected by the center but these are distributed
between the center and the state both, i.e. income tax.
 Article 273 contains the provisions regarding the grants provided to the states by
the central government, out of consolidated fund of India. The states of Assam, West
Bengal, Bihar and Oidssa have been given grants in lieu of export duty on jute and
jute products as well.
 A finance commission is appointed by the President of India after every five years
which makes recommendations on the financial matters to be referred by the
President.