Page 6 - Chapter 1

CCP 01.05.10.00 apply from the date to be notified by the Government on the recommendations by
CH 1
the GST Council.
Why was the need to amend the Constitution of India before introducing the
Introduction of GST Answer:- Earlier, the fiscal powers between the Centre and the States were clearly Discuss Article 269A pertaining to levy and collection of GST on inter-State
GST ? [ICAI Material]
CCP 01.05.12.00

demarcated in the Constitution with almost no overlap between the respective
supply. [ICAI Material]
domains.
Answer:- Article 269A of the Constitution stipulates that Goods and Services Tax

The Centre had the powers to levy tax on the manufacture of goods (except
alcoholic liquor for human consumption, opium, narcotics etc.) while the States had
collected by the Government of India and such tax shall be apportioned between
the powers to levy tax on the sale of goods. In the case of inter- State sales, the on supplies in the course of inter-State trade or commerce shall be levied and
Centre had the power to levy the Central Sales Tax but the tax was collected and the Union and the States in the manner as may be provided by Parliament by law on
retained entirely by the States. As for services, it was the Centre alone that was the recommendations of the Goods and Services Tax Council.
empowered to levy service tax. Here, supply of goods, or of services, or both in the course of import into the territory
Introduction of the GST necessitated the amendments in the of India shall be deemed to be supply of goods, or of services, or both in the course of
Constitution so as to simultaneously empower the Centre and the States to levy and inter-State trade or commerce.

collect this tax. The Constitution of India was amended by the Constitution (101st The amount so apportioned to a State shall not form part of the Consolidated Fund of
Amendment) Act, 2016 for this purpose. Article 246A of the Constitution introduced India. Where an amount collected as IGST has been used for payment of SGST or vice
thereby empowered the Centre and the States to simultaneously levy and collect the versa, such amount shall not form part of the Consolidated Fund of India/State
GST. respectively. This is to facilitate transfer of funds between the Centre and the
States.
CCP 01.05.11.00 Parliament is empowered to formulate the principles for determining the place of
Discuss Article 246A which grants the power to make laws with respect to
supply, and when a supply of goods, or of services, or both takes place in the course of
Goods and Services Tax. [ICAI Material]
inter-State trade or commerce.
Answer:- Article 246A stipulates that Parliament, and, the Legislature of every

State, have power to make laws with respect to goods and services tax imposed by CCP 01.05.13.00
the Union or by such State.
"State Government has exclusive power to notify a transaction to be supply of
Parliament has exclusive power to make laws with respect to goods and services tax goods or services." Discuss the correctness of the statement. (ICAI material)
where the supply of goods, or of services, or both takes place in the course of inter-
Answer: The said statement is not correct.
State trade or commerce. State Government can notify a transaction to be supply of goods or services but only
However, in respect to petroleum crude, high speed diesel, motor spirit (commonly
on the recommendations of the GST Council.
known as petrol), natural gas and aviation turbine fuel, the aforesaid provisions shall Further, Central Government or State Government, both on the recommendations of

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