What is Article 269A of Indian Constitution – Defination & Meaning

Article 269A: Levy and collection of goods and services tax in course of inter-State trade or commerce (1) Goods and services tax on supplies in the course of
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Article Number

269A

part

Part XII – Finance, Property, Contracts and Suits

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Bare Acts Text

Article 269A: Levy and collection of goods and services tax in course of inter-State trade or commerce

  • (1) Goods and services tax 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 Goods and Services Tax Council.
  • Explanation.—For the purposes of this clause, supply of goods, or of services, or both in the course of import into the territory of India shall be deemed to be supply of goods, or of services, or both in the course of inter-State trade or commerce.
  • (2) The amount apportioned to a State under clause (1) shall not form part of the Consolidated Fund of India.
  • (3) Where an amount collected as tax levied under clause (1) has been used for payment of the tax levied by a State under article 246A, such amount shall not form part of the Consolidated Fund of India.
  • (4) Where an amount collected as tax levied by a State under article 246A has been used for payment of the tax levied under clause (1), such amount shall not form part of the Consolidated Fund of the State.
  • (5) Parliament may, by law, 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.
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Full Definition & Explanation

Article 269A of the Indian Constitution focuses on the levy and collection of goods and services tax (GST) during inter-State trade or commerce. This means that when businesses sell goods or provide services that cross state lines, the tax is collected by the Government of India. This system is aimed at simplifying tax collection and ensuring that the states receive their fair share of revenue. It helps in promoting a unified market across India, making it easier for businesses to operate without facing multiple tax barriers. The article also emphasizes the role of the Goods and Services Tax Council, which makes recommendations on how the tax should be distributed between the central and state governments. This council is key because it brings together representatives from both levels of government to discuss and decide on tax policies. The tax collected is then apportioned according to guidelines set by Parliament, ensuring transparency and fairness in revenue distribution. Importantly, any amount collected as tax under this article does not go into the Consolidated Fund of India. This means that the money collected is earmarked specifically for distribution to the states, and cannot be used for other purposes by the central government. This provision is designed to protect the revenue rights of the states, encouraging them to support inter-State trade initiatives. Overall, Article 269A plays a key role in the economic integration of India, impacting businesses and consumers alike by streamlining tax processes.

Historical Context

This means that when businesses sell goods or provide services that cross state lines, the tax is collected by the Government of India. This system is aimed at simplifying tax collection and ensuring that the states receive their fair share of revenue. It helps in promoting a unified market across India, making it easier for businesses to operate without facing multiple tax barriers. The article also emphasizes the role of the Goods and Services Tax Council, which makes recommendations on how the tax should be distributed between the central and state governments.

Key Features

– Article 269A governs the collection of GST during inter-State trade.
– The Government of India is responsible for levying and collecting GST.
– The Goods and Services Tax Council recommends tax distribution methods.
– Funds collected do not enter the Consolidated Fund of India.
– Parliament can set principles for determining inter-State supply locations.

Importance & Impact

– Streamlines tax collection for businesses operating across state lines
– Encourages economic growth by simplifying inter-State trade processes
– Ensures fair revenue sharing between the central and state governments.
– Protects state revenue rights by excluding funds from central control.
– Facilitates cooperation between states for effective tax administration

Sample UPSC Question

Which of the following statements about Article 269A is correct? A) It allows states to levy GST on services. B) The GST Council recommends how to distribute GST revenue. C) All GST collected goes to the central government. D) Article 269A is part of Part IX of the Constitution. 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) The GST Council recommends how to distribute GST revenue. This article clearly defines the central government’s role in collecting GST for inter-State commerce and outlines the importance of the GST Council in revenue sharing. Article 269A of the Indian Constitution focuses on the levy and collection of goods and services tax (GST) during inter-State trade or commerce.

Key Takeaways

✓ Article 269A deals with GST on inter-State trade.
✓ The Government of India collects the tax on behalf of states.
✓ Revenue is distributed based on GST Council recommendations.
✓ Funds collected are not part of the central revenue pool.
✓ Parliament can define rules for inter-State tax collection.

FAQs

Article 269A of the Indian Constitution focuses on the levy and collection of goods and services tax (GST) during inter-State trade or commerce. This means that when businesses sell goods or provide services that cross state lines, the tax is collected by the Government of India. This system is aimed at simplifying tax collection and ensuring that the states receive their fair share of revenue.

This council is key because it brings together representatives from both levels of government to discuss and decide on tax policies. The tax collected is then apportioned according to guidelines set by Parliament, ensuring transparency and fairness in revenue distribution. Importantly, any amount collected as tax under this article does not go into the Consolidated Fund of India.

This means that the money collected is earmarked specifically for distribution to the states, and cannot be used for other purposes by the central government. This provision is designed to protect the revenue rights of the states, encouraging them to support inter-State trade initiatives. Overall, Article 269A plays a key role in the economic integration of India, impacting businesses and consumers alike by streamlining tax processes.

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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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