The Goods and Services Tax (GST) is one of the most significant tax reforms in India. It aims to streamline the indirect taxation system by replacing multiple taxes with a single tax. The implementation of GST required a constitutional amendment, which led to the introduction of Article 246A in the Indian Constitution. This article provides a special provision with respect to the Goods and Services Tax and defines the legislative powers of the central and state governments in relation to GST.

Understanding Article 246A

Article 246A was inserted into the Indian Constitution through the 101st Constitutional Amendment Act, 2016. It grants concurrent powers to both the central and state governments to legislate on matters related to the GST. This means that both the central and state governments have the authority to make laws on the subject of GST.

However, there are certain limitations to this concurrent power. The article specifies that the central government has exclusive power to make laws on inter-state trade or commerce, and the state governments have the power to make laws on intra-state trade or commerce. This ensures that both the central and state governments have the necessary authority to regulate and administer the GST effectively.

Legislative Powers of the Central Government

The central government has been given exclusive powers to make laws on inter-state trade or commerce under Article 246A. This means that it can legislate on matters such as the levy and collection of GST on the supply of goods and services in the course of inter-state trade or commerce.

The central government is also responsible for the administration of GST in the case of inter-state transactions. It has the power to levy and collect Integrated Goods and Services Tax (IGST), which is a combination of Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST).

Furthermore, the central government has the authority to formulate principles for determining the place of supply, and to prescribe the manner in which IGST will be apportioned between the central and state governments. These powers ensure uniformity and consistency in the application of GST across different states.

Legislative Powers of the State Governments

Under Article 246A, the state governments have the power to make laws on matters related to intra-state trade or commerce. This means that they can legislate on the levy and collection of GST on the supply of goods and services within their respective states.

The state governments are responsible for the administration of GST in the case of intra-state transactions. They have the power to levy and collect State Goods and Services Tax (SGST), which is applicable to the supply of goods and services within a state.

Additionally, the state governments have the authority to determine the threshold for registration under GST, subject to the provisions made by the central government. This allows the state governments to tailor the GST regulations to suit the specific needs and conditions of their respective states.

Harmonious Coexistence of Central and State Laws

Article 246A ensures a harmonious coexistence of central and state laws in relation to GST. It provides for the division of legislative powers between the central and state governments, while also allowing for the concurrent exercise of these powers.

While the central government has exclusive powers to legislate on inter-state trade or commerce, it cannot encroach upon the legislative powers of the state governments in relation to intra-state trade or commerce. Similarly, the state governments cannot make laws on matters falling within the exclusive domain of the central government.

This division of powers ensures that both the central and state governments can effectively administer and regulate GST without any conflict or overlap. It also allows for the seamless implementation of GST across the country, promoting a unified tax system.

Conclusion

Article 246A of the Indian Constitution plays a crucial role in defining the legislative powers of the central and state governments with respect to the Goods and Services Tax. It grants concurrent powers to both the central and state governments, while also providing for the exclusive powers of the central government in relation to inter-state trade or commerce.

This provision ensures a harmonious coexistence of central and state laws, allowing for the effective administration and regulation of GST. It promotes a unified tax system and contributes to the overall economic development of the country.