What is Article 246A of Indian Constitution – Defination & Meaning

Article 246A: Special provision with respect to goods and services tax (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and,
📅 Part XI – Relations Between the Union and the States
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Article Number

246A

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Part XI – Relations Between the Union and the States

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Active

Bare Acts Text

Article 246A: Special provision with respect to goods and services tax

  • (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.
  • (2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.
  • Explanation.—The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council.
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Full Definition & Explanation

Article 246A was inserted by the 101st Amendment Act (2016) to pave the way for the Goods and Services Tax (GST). This article represents a unique deviation from the standard federal distribution of powers, as it grants simultaneous power to both the Parliament and the State Legislatures to make laws regarding GST imposed by the Union or by such State. In 2022, the Supreme Court in the Mohit Minerals case clarified that the recommendations of the GST Council are not binding on Parliament or State Legislatures, reinforcing the cooperative federalism structure of Article 246A.

Historical Context

This article empowers both Parliament and state legislatures to create laws regarding GST. This means that both the central government and individual state governments can impose taxes on goods and services, thus allowing for a flexible approach to taxation that can adapt to regional needs. By doing so, it ensures that states can generate revenue while also adhering to the broader framework set by the Union government. An key aspect of Article 246A is that it grants exclusive power to Parliament in certain situations.

Key Features

– Article 246A allows both Parliament and state legislatures to legislate on GST.
– Parliament has exclusive power for GST on inter-State goods and services trade.
– The article ensures a flexible tax system for both central and state needs.
– GST implementation promotes uniformity in tax laws across India.
– The Goods and Services Tax Council recommends the effective date for GST laws.

Importance & Impact

– This article empowers states to create their own GST laws.
– It provides a framework for inter-State trade taxation
– Article 246A simplifies tax compliance for businesses
– It promotes economic growth by unifying the tax structure
– The article ensures fair revenue distribution between states and the Union.

Sample UPSC Question

Which of the following statements about Article 246A is correct? A) It allows only the Parliament to legislate for GST. B) Both Parliament and state legislatures can legislate on GST. C) GST can only be imposed by state governments. D) Article 246A is not related to taxation. Choose the correct option.? Analyze these options carefully in light of the constitutional distribution of legislative and executive powers.

Answer

The correct answer is B. Article 246A allows both Parliament and state legislatures to create laws regarding Goods and Services Tax. This dual power ensures flexibility and responsiveness to regional economic needs while maintaining a unified tax structure. Article 246A of the Indian Constitution plays a major role in the governance of Goods and Services Tax (GST) in India.

Key Takeaways

✓ Article 246A allows dual legislative powers for GST.
✓ It centralizes inter-State commerce taxation in Parliament
✓ The article simplifies tax compliance for businesses
✓ It promotes a unified tax structure in India.
✓ The GST Council plays a key role in implementation.

FAQs

Article 246A of the Indian Constitution plays a major role in the governance of Goods and Services Tax (GST) in India. This article empowers both Parliament and state legislatures to create laws regarding GST. This means that both the central government and individual state governments can impose taxes on goods and services, thus allowing for a flexible approach to taxation that can adapt to regional needs.

This is key because inter-state commerce often involves multiple jurisdictions and could lead to conflicting tax laws if not managed centrally. This provision helps maintain uniformity in tax regulations, promoting smoother trade across states. The implementation of this article has had a real-world impact, simplifying the tax structure in India.

For instance, small businesses that once struggled with numerous tax filings can now report under a single tax system. Also, states benefit from shared revenue from GST, which can enhance local infrastructure and services. Overall, Article 246A is pivotal in creating a unified tax system that balances the powers between the central and state governments.

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Editor-in-Chief Pramod

Pramod is the Founder and Editor-in-Chief of StudyHub. He holds a Master's degree and is currently pursuing a Ph.D. in Geology, alongside more than 7+ years spent building and verifying competitive exam content for Indian aspirants. He leads StudyHub's editorial process across Indian Polity, the Constitution, Indian Economy, History, Geography, Science, and the platform's other subject areas — checking every article against primary sources (bare act text and Gazette notifications for constitutional topics, government and Economic Survey data for economy content, standard reference material elsewhere) and flagging it for re-verification whenever a relevant amendment, policy, or data update makes an earlier version outdated.
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