Amendments of the Constitution of India: GST Introduced

The Constitution (101st Amendment) Act 2016. One Hundred and First Amendment of the Constitution of India. GST i.e. Goods and Services Tax.

101st Constitution Amendment Act, 2016 was enacted for levy and collection of Goods and Services Tax (GST) in India. One Hundred and First Amendment of the Constitution of India inserted various new articles (246A, 269A, 279A) and amended various articles viz. 248, 249, 250, 268, 269, 270, 271, 286, 366, 368 etc.

As of January 2020, there have been 104th amendments of the Constitution of India since it was first enacted in 1950. There are three types of amendments to the Constitution of India of which second and third type of amendments are governed by Article 368.

  • The first type of amendments includes that can be passed by “simple majority” in each house of the Parliament of India.
  • The second type of amendments includes that can be effected by the parliament by a prescribed “special majority” in each house; and
  • The third type of amendments includes those that require, in addition to such “special majority” in each house of the parliament, ratification by at least one half of the State Legislatures.

The third type amendments that are made to the constitution are amendments No. 3, 6, 7, 8, 13, 14, 15, 16, 22, 23, 24, 25, 28, 30, 31, 32, 35, 36, 38, 39, 42, 43, 44, 45, 46, 51, 54, 61, 62, 70, 73, 74, 75, 79, 84, 88, 95, 99, 101, 102, 103 and 104.

Introduced the Goods and Services Tax (GST): One Hundred and First Amendment of the Constitution of India has also states about compensation to States for loss of revenue on account of introduction of GST and Power of President to remove difficulties.

101st Amendment of the Constitution of India

1 Short title and commencement

(1) This Act may be called the Constitution (One Hundred and First Amendment) Act, 2016.

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the commencement of that provision.

2 Insertion of new article 246A

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.

3 Amendment of article 248

In article 248 of the Constitution, in clause (1), for the word “Parliament”, the words, figures and letter “Subject to article 246A, Parliament” shall be substituted.

4 Amendment of article 249

In article 249 of the Constitution, in clause (1), after the words “with respect to”, the words, figures and letter “goods and services tax provided under article 246A or” shall be inserted.

5 Amendment of article 250

In article 250 of the Constitution, in clause (1), after the words “with respect to”, the words, figures and letter “goods and services tax provided under article 246A or” shall be inserted.

6 Amendment of article 268

In article 268 of the Constitution, in clause (1), the words “and such duties of excise on medicinal and toilet preparations” shall be omitted.

7 Omission of article 268A

Article 268A of the Constitution, as inserted by section 2 of the Constitution (Eightyeighth Amendment) Act, 2003 shall be omitted.

8 Amendment of article 269

In article 269 of the Constitution, in clause (1), after the words “consignment of goods”, the words, figures and letter “except as provided in article 269A” shall be inserted.

9 Insertion of new article 269A

After article 269 of the Constitution, the following article shall be inserted, namely: —

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.’’.

10 Amendment of article 270

In article 270 of the Constitution, —

(i) in clause (1), for the words, figures and letter “articles 268, 268A and article269″, the words, figures and letter” articles 268, 269 and article 269A” shall be substituted;

ii) after clause (1), the following clause shall be inserted, namely: —
(1A) The tax collected by the Union under clause (1) of article 246A shall also be distributed between the Union and the States in the manner provided in clause (2).
(1B) The tax levied and collected by the Union under clause (2) of article 246A and article 269A, which has been used for payment of the tax levied by the Union under clause (1) of article 246A, and the amount apportioned to the Union under clause (1) of article 269A, shall also be distributed between the Union and the States in the manner provided in clause (2).

11 Amendment of article 271

In article 271 of the Constitution, after the words ‘‘in those articles’’, the words, figures and letter ‘‘except the goods and services tax under article 246A,’’ shall be inserted.

12 Insertion of new article 279A

After article 279 of the Constitution, the following article shall be inserted, namely: —

Article 279A: Goods and Services Tax Council

(1) The President shall, within sixty days from the date of commencement of the Constitution (One Hundred and First Amendment) Act, 2016, by order, constitute a Council to be called the Goods and Services Tax Council.

(2) The Goods and Services Tax Council shall consist of the following members, namely: —

(a) the Union Finance Minister…………. Chairperson;
(b) the Union Minister of State in charge of Revenue or Finance………… Member;
(c) the Minister in charge of Finance or Taxation or any other Minister nominated by each
State Government………… Members.

(3) The Members of the Goods and Services Tax Council referred to in sub-clause (c) of clause (2) shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide.

(4) The Goods and Services Tax Council shall make recommendations to the Union and the States on —

(a) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax;
(b) the goods and services that may be subjected to, or exempted from the goods and services tax;
(c) model Goods and Services Tax Laws, principles of levy, apportionment of Goods and Services Tax levied on supplies in the course of inter-State trade or commerce under article 269A and the principles that govern the place of supply;
(d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax;
(e) the rates including floor rates with bands of goods and services tax;
(f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;
(g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
(h) any other matter relating to the goods and services tax, as the Council may decide.

(5) The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.

(6) While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services.

(7) One half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings.

(8) The Goods and Services Tax Council shall determine the procedure in the performance of its functions.

(9) Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely: —

(a) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and
(b) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting.

(10) No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of—

(a) any vacancy in, or any defect in, the constitution of the Council; or
(b) any defect in the appointment of a person as a member of the Council; or
(c) any procedural irregularity of the Council not affecting the merits of the case.

(11) The Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute —

(a) between the Government of India and one or more States; or
(b) between the Government of India and any State or States on one side and one or more other States on the other side; or
(c) between two or more States,

13 Amendment of article 286

In article 286 of the Constitution, —

(i) in clause (1), —

(A) for the words “the sale or purchase of goods where such sale or purchase takes place”, the words “the supply of goods or of services or both, where such supply takes place” shall be substituted;
(B) in sub-clause (b), for the word “goods”, at both the places where it occurs the words “goods or services or both” shall be substituted;

(ii) in clause (2), for the words “sale or purchase of goods takes place”, the words “supply of goods or of services or both” shall be substituted;
(iii) clause (3) shall be omitted.

14 Amendment of article 366

In article 366 of the Constitution, —

(i) after clause (12), the following clause shall be inserted, namely: —
‘(12A) “goods and services tax” means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption;’;

(ii) after clause (26), the following clauses shall be inserted, namely: —
‘(26A) “Services” means anything other than goods;
(26B) “State” with reference to articles 246A, 268, 269, 269A and article 279A includes a Union territory with Legislature;’.

15 Amendment of article 368

In article 368 of the Constitution, in clause (2), in the proviso, in clause (a), for the words and figures “article 162 or article 241”, the words, figures and letter “article 162, article 241 or article 279A” shall be substituted.

16 Amendment of Sixth Schedule

In the Sixth Schedule to the Constitution, in paragraph 8, in sub-paragraph (3), —

(i) in clause (c), the word “and” occurring at the end shall be omitted;
(ii) in clause (d), the word “and” shall be inserted at the end;
(iii) after clause (d), the following clause shall be inserted, namely: —
“(e) taxes on entertainment and amusements.”.

17 Amendment of Seventh Schedule

In the Seventh Schedule to the Constitution, —

(a) in List I — Union List, —
(i) for entry 84, the following entry shall be substituted, namely: —
“84. Duties of excise on the following goods manufactured or produced in India, namely: —
(a) petroleum crude;
(b) high speed diesel;
(c) motor spirit (commonly known as petrol);
(d) natural gas;
(e) aviation turbine fuel; and
(f) tobacco and tobacco products.”;
(ii) entries 92 and 92C shall be omitted;
(b) in List II — State List, —
(i) entry 52 shall be omitted;
(ii) for entry 54, the following entry shall be substituted, namely: —
“54. Taxes on the sale of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption, but not including sale in the course of inter-State trade or commerce or sale in the course of international trade or commerce of such goods.”;
(iii) entry 55 shall be omitted;
(iv) for entry 62, the following entry shall be substituted, namely: —
“62. Taxes on entertainments and amusements to the extent levied and collected by a Panchayat or a Municipality or a Regional Council or a District Council.”.

18 Compensation to States for loss of revenue on account of introduction of goods and services tax

Parliament may, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for such period which may extend to five years.

19 Transitional provisions

Notwithstanding anything in this Act, any provision of any law relating to tax on goods or services or on both in force in any State immediately before the commencement of this Act, which is inconsistent with the provisions of the Constitution as amended by this Act shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until expiration of one year from such commencement, whichever is earlier.

20 Power of President to remove difficulties

(1) If any difficulty arises in giving effect to the provisions of the Constitution as amended by this Act (including any difficulty in relation to the transition from the provisions of the Constitution as they stood immediately before the date of assent of the President to this Act to the provisions of the Constitution as amended by this Act), the President may, by order, make such provisions, including any adaptation or modification of any provision of the Constitution as amended by this Act or law, as appear to the President to be necessary or expedient for the purpose of removing the difficulty:

Provided that no such order shall be made after the expiry of three years from the date of such assent.

(2) Every order made under sub-section (1) shall, as soon as may be after it is made, be laid before each House of Parliament.

NOTE: Thereafter, 102nd, 103rd and 104th amendments of the Constitution of India has been made.


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