Special Provision for GST Legislation

GST legislative power in India rests on a special constitutional provision, Article 246A, rather than on the ordinary Union List, State List, and Concurrent List scheme found elsewhere in the Constitution. Inserted by the Constitution (One Hundred and First Amendment) Act, 2016, Article 246A gives both Parliament and the State Legislatures the power to make laws on goods and services tax, marking a departure from the usual either/or logic of Article 246.

Article 246A: A Standalone Grant of Power

Section 2 of the 101st Amendment Act, 2016 inserted Article 246A into the Constitution, along with Article 279A, to provide the constitutional basis for the Goods and Services Tax regime in India, with effect from 16 September 2016. Article 246A opens with a non-obstante clause — "Notwithstanding anything contained in articles 246 and 254" — before granting Parliament, and, subject to a further condition, the Legislature of every state, the power to make laws with respect to goods and services tax imposed by the Union or by that state. By overriding both Article 246, which governs the ordinary Union List/State List/Concurrent List division, and Article 254, which governs repugnancy between central and state laws, Article 246A carves GST out as a distinct, self-contained legislative field rather than folding it into the existing three-list scheme.

Parliament's Exclusive Power Over Inter-State GST

Within this special scheme, one aspect remains reserved to Parliament alone. Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, of services, or of both takes place in the course of inter-state trade or commerce. This carve-out mirrors the logic of the earlier Union List, which reserved matters of national or inter-state character to Parliament, while the general power under Article 246A(1) allows both Parliament and the states to legislate on GST within their own respective domains.

The GST Council Under Article 279A

Article 279A, inserted alongside Article 246A by the same 101st Amendment, establishes the Goods and Services Tax Council. The Council is chaired by the Union Finance Minister, with the Finance Ministers of the states as members. It makes recommendations on GST-related matters, including the taxes to be subsumed into GST, applicable rates, exemptions, and other special provisions. The Council's recommendatory role gives it a central place in the working of the GST framework, since the exercise of the legislative power granted under Article 246A is closely tied to the Council's recommendations.

This link is made explicit in Article 246A itself: an explanation attached to the article provides that, in respect of the inter-state GST covered by clause (2) of Article 279A, the provisions of Article 246A take effect from the date recommended by the GST Council. In other words, Parliament's exclusive power over inter-state GST was not automatically operative the moment the 101st Amendment came into force; its commencement depended on a specific recommendation from the GST Council.

Consequential Change to Residuary Power

The insertion of Article 246A also required a consequential change to Article 248, the residuary powers provision. Article 248 now provides that, subject to Article 246A, Parliament has exclusive power to make any law with respect to a matter not enumerated in the Concurrent List or the State List. This qualification recognises that GST legislative power now flows through its own dedicated article rather than through the residuary clause or the ordinary Seventh Schedule lists.

UPSC Relevance

Prelims

• Article 246A was inserted by the Constitution (101st Amendment) Act, 2016, with effect from 16 September 2016.
• Article 246A overrides both Article 246 (List-based distribution) and Article 254 (repugnancy) for GST legislation.
• Parliament has exclusive power over GST on inter-state supply of goods or services.
• Article 279A establishes the GST Council, chaired by the Union Finance Minister with state Finance Ministers as members.

Mains

• Discuss how Article 246A departs from the ordinary Seventh Schedule scheme of legislative distribution, and what this reveals about the design of India's GST framework.
• Examine the role of the GST Council under Article 279A in shaping the exercise of legislative power under Article 246A.

FAQ

What is Article 246A? It is a special constitutional provision, inserted by the 101st Amendment Act, 2016, giving Parliament and State Legislatures concurrent power to make laws on goods and services tax, overriding the ordinary Article 246/254 scheme.

When did Article 246A come into force? It came into effect on 16 September 2016, the date the Constitution (101st Amendment) Act, 2016 was notified.

Who has exclusive power over inter-state GST? Parliament has exclusive power to make laws on GST where the supply of goods, services, or both takes place in the course of inter-state trade or commerce.

What is the GST Council? A body established under Article 279A, chaired by the Union Finance Minister with the Finance Ministers of the states as members, that makes recommendations on GST rates, exemptions, and other special provisions.

How does the GST Council relate to Article 246A? Under the explanation to Article 246A, the provisions relating to inter-state GST take effect only from the date recommended by the GST Council under Article 279A(5).

Quick Revision

• Article 246A: inserted by 101st Amendment Act, 2016, effective 16 September 2016.
• Non-obstante clause: overrides Articles 246 and 254 for GST legislation.
• Parliament and states both empowered to legislate on GST generally.
• Parliament has exclusive power over inter-state GST.
• Article 279A: GST Council — Union FM (Chair) + state FMs; recommends rates, exemptions, special provisions.
• Article 248 (residuary power) now expressly subject to Article 246A.

Sources

• Constitution of India, Articles 246A, 248, 279A — legislative.gov.in
• The Constitution (One Hundred and First Amendment) Act, 2016 — legislative.gov.in

Further Reference

For deeper reading on this topic and the wider polity syllabus, these standard works are recommended:

• M. Laxmikanth, Indian Polity (McGraw Hill) — the standard UPSC handbook.
• D.D. Basu, Introduction to the Constitution of India (LexisNexis) — authoritative constitutional-law treatment.
• The Constitution of India — Bare Act — the official text.