Article 246A

Background and evolution

Before GST, the Constitution divided taxing powers sharply: the Union could tax manufacture (excise) and services, while states taxed the sale of goods (sales tax and later VAT). This led to cascading taxes, many separate levies and barriers to a common national market. A unified GST required both the Union and the states to be able to tax the same transactions, which was not possible under the existing Seventh Schedule.

After more than a decade of negotiation, beginning with the Kelkar Task Force's recommendation in 2004 and an Empowered Committee of State Finance Ministers, Parliament passed the 101st Amendment in 2016. It was ratified by more than half the states and came into force in September 2016. GST itself was rolled out on 1 July 2017.

Key features and provisions

• Simultaneous power (246A(1)): notwithstanding Articles 246 and 254, Parliament and the legislature of every state have power to make laws on goods and services tax imposed by the Union or by that state.
• Inter-state supply (246A(2)): Parliament has exclusive power over GST where the supply of goods or services takes place in the course of inter-state trade or commerce.
• Petroleum products (Explanation): the provisions apply to petroleum crude, high-speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel from the date recommended by the GST Council.
• Related changes: Article 269A (IGST and its apportionment), Article 279A (GST Council), Article 366(12A) (definition of GST), and amendments to the Seventh Schedule.
• Exclusions: alcoholic liquor for human consumption is outside GST.