Article 304

Background and evolution

Article 301 declares that trade, commerce and intercourse throughout India shall be free. The framers wanted a single national market, avoiding the internal customs barriers that had existed under princely states. But they also recognised that states needed some room to tax and regulate. Article 304 provides this room with safeguards: taxes must not discriminate against goods from other states, and restrictions must be reasonable, in the public interest and approved by the President in advance.

Part XIII was influenced by Section 92 of the Australian Constitution, which says trade among states shall be "absolutely free", a phrase that produced much litigation there. India's framers chose a more qualified model.

Key features and provisions

• Clause (a): a state may tax goods from other states if similar goods made in the state face the same tax.
• Clause (b): a state may impose reasonable restrictions on freedom of trade with or within the state as required in the public interest.
• Previous sanction: a 304(b) Bill or amendment must be introduced only with the President's prior sanction; Article 255 allows later assent to cure some defects.
• Article 302: Parliament may impose restrictions in the public interest.
• Article 303: Parliament cannot give preference to one state over another, except in scarcity.
• Article 305: saving for existing laws and state monopolies.