Constitutional provisions for GST — Articles 246A, 269A, 270, 286, 366 and the 101st Amendment

# Constitutional Backbone of GST

India's Constitution is a three-tier federal tax structure — Union, State, and Local. Pre-GST, the Centre and States had mutually exclusive tax powers (Centre: manufacture/services; State: sale of goods). GST needed concurrent power on the same supply → required a constitutional amendment.

## The starting point — basic articles

• Article 265: 'No tax shall be levied or collected except by authority of law.' The bedrock principle.
• Article 245: Parliament can make laws for whole/part of India; State legislatures for whole/part of their State. Extraterritorial operation cannot invalidate a Parliamentary law.
• Article 246: Distributes legislative power between Centre and States.
• Seventh Schedule to Article 246: Three Lists —
• List I (Union): Entries 82–91 are tax entries (Income tax = Entry 82, Customs = Entry 83).
• List II (State): Entries 45–63 are tax entries.
• List III (Concurrent): Both can legislate.

## Why constitutional amendment was needed

Before GST:

• Centre levied: Excise (Entry 84), Service Tax, Customs, CST.
• States levied: VAT, Entry tax, Luxury tax, Entertainment tax, Octroi.

GST requires both to tax the same supply concurrently — which Article 246 did not permit. Hence the Constitution (101st Amendment) Act, 2016 — 20 sections; Article 279A notified on 12 September 2016; remaining provisions notified on 16 September 2016.

## The new and amended articles

### Article 246A (NEWLY INSERTED) — heart of GST

• Empowers both Centre and States to make laws for levy of GST.
• Centre has exclusive power for GST on inter-State supplies.
• Operates notwithstanding Articles 246 and 254 (which deal with parliamentary supremacy).

### Article 248 (amended)

Parliament's residuary power to legislate on matters not in any List is now subject to Article 246A — so GST takes priority over residuary power.

### Articles 249 and 250 (amended)

Parliament can legislate on State-List matters in the national interest (by ≥ 2/3rd majority of members present and voting) or during a Proclamation of Emergency — extended to GST under Article 246A.

### Article 268 (amended)

This covered duties levied by Centre but collected by States. The CAA omits 'excise duties on medicinal & toilet preparations' since they are now under GST.

### Article 268A (omitted)

Service tax (originally Entry 97 of Union List; moved to Entry 92C by the 88th Amendment, 2003) was carved into Article 268A — but never operationalised. The CAA omits it.

### Article 269A (NEW) — Inter-State GST

• GST on inter-State supply is levied and collected by the Government of India.
• Apportioned between Union and States as per law on GST Council recommendation.
• Imports are deemed inter-State trade → IGST replaces erstwhile CVD/SAD.
• If IGST is used towards SGST (or vice versa), the amount does not go to the Consolidated Fund of India / State.
• Parliament shall define the principles for place of supply for inter-State trade.

### Article 270 (amended)

Distributes GST between Centre and States based on Finance Commission recommendations, for taxes levied under Articles 246A(1), (2) and 269A(1).

### Article 271 (amended)

Parliament's power to levy surcharges under Articles 269/270 is excluded for GST — Centre cannot unilaterally surcharge GST.

### Article 286 (amended)

Restricts States from taxing supplies outside the State or in the course of import/export. CAA replaced 'sale/purchase' with 'supply' and 'goods' with 'goods/services/both'.

### Article 366 — KEY DEFINITIONS

• Article 366(12A): 'Goods and services tax' means any tax on supply of goods, or services, or both, except taxes on supply of alcoholic liquor for human consumption.
• Article 366(26A): 'Services' means anything other than goods.
• Article 366(26B): 'State' includes a Union Territory with legislature.

### Article 368 (amended)

Any amendment of Article 279A (GST Council) requires:

• Two-thirds majority in Parliament, and
• Ratification by at least half of the States.

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