Part XI: Legislative Relations

Article 246A: Special Provision with Respect to GST

Original Article:

(1) Notwithstanding anything contained in Articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.

(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.

Explanation: The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of Article 279A, take effect from the date recommended by the Goods and Services Tax Council.

Amendments:

1. Inserted by the Constitution (One Hundred and First Amendment) Act, 2016, (w.e.f. 16-9-2016).

Explanations:

Article 246A introduces a special framework for Goods and Services Tax (GST), granting concurrent powers to both Parliament and State Legislatures to legislate on GST matters. This article ensures uniformity in taxation across the nation while addressing regional and national interests.

Clause (1): Concurrent Powers on GST

Both Parliament and State Legislatures can legislate on GST matters within their jurisdictions, ensuring a federal cooperative approach to taxation.

Clause (2): Exclusive Powers on Inter-State GST

Parliament has exclusive powers over GST for inter-state trade, ensuring consistent tax policies across state boundaries.

Explanation Clause:

GST laws become effective based on dates recommended by the GST Council, which ensures coordination between the Union and States.

Real-Life Examples:

The GST system applies uniformly across India, with inter-state transactions governed by the Integrated GST (IGST). For example, IGST applies when goods are transported from Maharashtra to Karnataka, while Central GST (CGST) and State GST (SGST) are applied to transactions within a state.

Historical Significance:

Enacted through the One Hundred and First Amendment, Article 246A marked a significant reform in India’s tax structure, unifying multiple indirect taxes into a single GST framework. It reflects India's shift towards a more simplified and efficient taxation system.

Debates and Deliberations:

Debates around Article 246A focused on ensuring states retain their fiscal autonomy while establishing a unified tax system. The GST Council's role emerged as a critical mechanism for cooperative federalism in taxation.