Article 246A was inserted by the 101st Constitutional Amendment Act 2016 to enable the implementation of the Goods and Services Tax (GST). It grants special legislative powers to both Parliament and State Legislatures with respect to GST.
This Article marked a major restructuring of fiscal federalism in India.
Textual Essence
Article 246A provides:
- Notwithstanding anything in Articles 246 and 254, Parliament and State Legislatures have the power to make laws with respect to GST imposed by the Union or by such State.
- Parliament has exclusive power to make laws with respect to GST where the supply of goods or services takes place in the course of inter-State trade or commerce.
The use of the phrase “notwithstanding” gives Article 246A overriding effect over the traditional distribution of legislative powers.
Significance
Special Concurrent Power
Unlike the traditional division under the Seventh Schedule, Article 246A creates a unique concurrent power specifically for GST.
Both:
- Centre can levy CGST
- States can levy SGST
Exclusive Power for Inter-State Trade
Parliament alone has authority over inter-State supply through Integrated GST (IGST), ensuring uniformity in cross-border transactions within India.
Impact on Federal Structure
Before GST:
- Centre taxed manufacture and services.
- States taxed sale of goods.
After Article 246A:
- Both Centre and States can tax supply of goods and services.
- Shift from origin-based to destination-based taxation.
It represents cooperative fiscal federalism, where taxation powers are shared rather than compartmentalised.
Relationship with Other Articles
- Article 269A governs inter-State GST collection and distribution.
- Article 279A establishes the GST Council.
- Article 246A operates independently of the Seventh Schedule lists.
Constitutional Innovation
Article 246A is unique because:
- It bypasses the traditional Union, State and Concurrent Lists structure.
- It creates a separate taxation regime embedded directly in the Constitution.
- It balances revenue authority between Union and States in a harmonised framework.
Conclusion
Article 246A is the constitutional foundation of GST in India. It redefined legislative competence over indirect taxation by granting concurrent powers to Parliament and State Legislatures while reserving inter-State GST exclusively for Parliament. It represents a structural shift toward integrated fiscal federalism.
