Page 5 - Ch1_Introduction

CCP 01.02.05.00

Discuss Article 269A pertaining to levy and collection of GST on inter-State supply. (Study Mat)
Answer:
Ü As per Article 269A of the Constitution, GST on supplies in the course of inter-State trade or commerce
shall be levied and collected by the Government of India and such tax shall be apportioned between the
Union and the States in the manner as may be provided by Parliament by law on the recommendations of

the GST Council.
Ü Here, supply of goods or services or both in the course of import into the territory of India shall be deemed
to be supply of goods or services or both in the course of inter-State trade or commerce.

Ü The amount so apportioned to a State shall not form part of the Consolidated Fund of India. Where an
amount collected as IGST has been used for payment of SGST or vice versa, such amount shall not form
part of the Consolidated Fund of India/State respectively. This is to facilitate transfer of funds between
the Centre and the States.

Ü Parliament is empowered to formulate the principles for determining the place of supply, and when a
supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.

CCP 01.02.06.00

Why was the need to amend the Constitution of India before introducing the GST? (Study Mat)
Answer:
Ü Earlier, the fiscal powers between the Centre and the States were clearly demarcated in the Constitution
with almost no overlap between the respective domains.

Ü 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 the powers to levy tax on the sale of goods.
Ü In the case of inter-State sales, the Centre had the power to levy the Central Sales Tax, but the tax was
collected and retained entirely by the States.

Ü As for services, it was the Centre alone that was empowered to levy service tax.
Ü Introduction of the GST necessitated the amendments in the Constitution so as to simultaneously
empower the Centre and the States to levy and collect this tax.
Ü The Constitution of India was amended by the Constitution (101st Amendment) Act, 2016 for this

purpose. Article 246A of the Constitution introduced thereby empowered the Centre and the States to
simultaneously levy and collect the GST.

CCP 01.02.07.00
Discuss Article 246A which grants the power to make laws with respect to Goods and Services Tax.

(Study Mat)
Answer:
Ü As per Article 246A of the constitution, Parliament & the Legislature of every State, have power to make
laws for GST imposed by the Union or by such State.

Ü Parliament has exclusive power to make laws with respect to GST where the supply of goods or services or
both takes place in the course of inter-State trade or commerce.
Ü However, in respect to petroleum crude, high speed diesel, motor spirit (commonly known as petrol),
natural gas and aviation turbine fuel, the aforesaid provisions shall apply from the date to be notified by

the Government on the recommendations by the GST Council.

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