Pre-GST Regime and GST Regime in respect of Indirect Taxes
Article 246 of Constitution of India
Article 246A inserted by Constitution (101st Amendment) Act, 2016
Article 246 gave power through Schedule VII to Parliament and Legislature of every State to make laws with respect to indirect taxes to be imposed by the union or by such State. In view of the above power, the Union Government levied some of the following indirect taxes:
1. Central Excise Duty on manufacture of goods
2. Service tax on provision of services
3. Customs duty including Additional customs duty (countervailing duty) and special additional duty of customs Similarly, respective State Governments levied some of the following indirect taxes:
1. State VAT
2. Luxury tax
3. Octroi and Entry tax
4. Purchase tax
5. Taxes on advertisements
(1) Clause (1) of Article 246A has given the power to Parliament and, the Legislature of every State, to make laws with respect to goods and services tax imposed by the Union or by such State.
(2) Clause (2) of Article 246A, provides that Parliament shall have 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.
(3) As per Article 269A, 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.
This tax shall be called as Integrated Goods and Service Tax (IGST)
In addition, Article 269A has given power to Central Government to levy IGST on the import transactions which were earlier subject to Countervailing duty and special additional duty of customs under the Customs Tariff Act, 1975.
(4) As per Article 279A(5), in respect to the following goods, the Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied—
(i) petroleum crude,
(ii) high speed diesel,
(iii) motor spirit (commonly known as petrol),
(iv) natural gas and
(v) aviation turbine fuel (ATF).
In view of the above powers, the Central and the State Governments have introduced Goods and Service Tax in India by subsuming (absorbing) many indirect taxes which were hitherto levied by the Central and State Governments under the pre-GST regime.
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